Perkins v. Lukens Steel Co.
310 U.S. 113 (1940)

Annotate this Case

U.S. Supreme Court

Perkins v. Lukens Steel Co., 310 U.S. 113 (1940)

Perkins v. Lukens Steel Co.

No. 593

Argued April 3, 1940

Decided April 29, 1940

310 U.S. 113

CERTIORARI TO THE COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA

Syllabus

The Public Contracts Act of June 30, 1936, requires that all contracts with the United States for the manufacture or furnishing of materials (in amounts exceeding $10,000) shall include a stipulation that all persons employed by the contractor in the manufacture or furnishing of such materials will be paid not less than the prevailing minimum wages "as determined by the Secretary of Labor . . . for persons employed . . . in the particular or similar industries . . . in the locality." Producers of iron and steel sought to enjoin the Secretary of Labor, and other officials and agents authorized to make purchases for the Government, from continuing

Page 310 U. S. 114

in effect a wage determination made by the Secretary for that industry. Complainants asserted that the construction given by the Secretary to the term "locality" was arbitrary, capricious, and unauthorized by law, and that if, in order to bid on Government contracts, they must abide by the wage determination thus made, they would suffer irreparable loss and damage, for which there was no plain, adequate, and complete remedy at law.

Held, that the complainants were without standing to maintain the suit. P. 310 U. S. 125.

1. The bill failed to show that any legal rights of the complainants were invaded or threatened. P. 310 U. S. 125.

2. In the absence of statute, damage resulting from action by the Government which does not invade any recognized legal right is irremediable. P. 310 U. S. 125.

3. That the Secretary of Labor is charged with an erroneous interpretation of the term "locality" in making the wage determination is no basis for the suit. P. 310 U. S. 125.

4. Complainants are not entitled to vindicate any general interest which the public may have in the Secretary's construction or administration of the Act. P. 310 U. S. 125.

5. Neither R.S. § 3709, requiring advertising for proposals in respect of Government purchases and contracts, nor the Public Contracts Act itself, affords any basis for the suit. P. 310 U. S. 126.

6. The Act does not provide for judicial review of wage determinations. P. 310 U. S. 128.

7. The Act vests no right in prospective bidders. P. 310 U. S. 127.

8. Congress has not by the Act exercised any regulatory power over private business or employment, and cases involving governmental regulation of private business are distinguishable. P. 310 U. S. 128.

9. The defendants have not tortiously invaded private rights. P. 310 U. S. 121.

10. Complainants were not entitled to a declaratory judgment. P. 310 U. S. 132.

11. The conclusion that the complainants lack standing to sue is based upon principles implicit in the constitutional division of authority in our system of Government and the impropriety of judicial interpretations of law at the instance of those who show no more than a possible injury to the public. P. 310 U. S. 132.

70 App.D.C. 354, 107 F.2d 627, reversed.

Certiorari, 309 U.S. 643, to review the reversal of a order of the District Court dismissing a bill in equity.

Page 310 U. S. 116

MR. JUSTICE BLACK delivered the opinion of the Court.

In exercise of its authority to determine conditions under which purchases of Government supplies shall be made, Congress passed the Public Contracts Act of June 30, 1936. [Footnote 1] By virtue of that Act, sellers must agree to pay employees engaged in producing goods so purchased

"not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular

Page 310 U. S. 117

or similar industries or groups of industries currently operating in the locality in which the . . . supplies . . . are to be manufactured or furnished under said contract."

The Court of Appeals for the District of Columbia has held that the Secretary erroneously construed the term "locality" to include a larger geographical area than the Act contemplates, and has ordered six Members of the Cabinet, including the Secretary of Labor, the Director of Procurement, and all other officials responsible for purchases necessary in the operation of the Federal Government, not to abide by or give effect to the wage determination made by the Secretary for the iron and steel industry either as to the complaining companies or any others. In this vital industry, by action of the Court of Appeals for the District of Columbia, the Act has been suspended and inoperative for more than a year.

We must therefore decide whether a Federal court, upon complaint of individual iron and steel manufacturers, may restrain the Secretary and officials who do the Government's purchasing from carrying out an administrative wage determination by the Secretary not merely as applied to parties before the Court, but as to all other manufacturers in this entire nationwide industry. Involving, as it does, the marking of boundaries of permissible judicial inquiry into administrative and executive responsibilities, this problem can best be understood against the background of what took place before the Court of Appeals for the District acted:

July 11, 1938, all the iron and steel companies in the United States were given notice that the Secretary contemplated proceedings for determining the minimum prevailing wage for their industry. On the 25th and 26th of that month, hearings were had before the Public Contracts Board, also functioning under the Act. Many companies, and all of those involved here, were represented in the hearings. Companies from the entire United

Page 310 U. S. 118

States filed briefs and submitted information and suggestions, and these producers who are parties here had notice of and actively participated in the various stages of the proceedings. After the hearing, time for filing of briefs was allowed. Following investigation of testimony, exhibits, letters, telegrams, briefs, data from the Bureau of Labor Statistics, and arguments of representatives of both labor and industry itself, the Board, October 27, 1938, made its findings of fact, conclusions and recommendations: (a), Accepting recommendations of industry and labor, the Board adopted -- with minor exceptions -- the definition of the steel industry previously in effect under the National Industrial Recovery Act, 48 Stat. 195; (b), "the base rates paid to the workers classified as common laborers" was utilized as a basis for finding the minimum wage prevailing in the industry and a common laborer was defined as "one who performs physical or manual labor of a general character and simple nature, requiring no special training, judgment nor skill;" (c), the view that municipalities be treated as the geographical limit of a "locality," and that different minimum prevailing wage standards be adopted for small, as distinguished from larger, companies, was rejected. The Board pointed out that "the main channels of trade in the industry take their course far beyond the confines of local producing areas;" that "conventional measurement of miles on the map to outline the marketing areas of the iron and steel producers" was unsuitable; that "geographic location does not limit the efforts of iron and steel manufacturers to secure Government business;" that "the workers being paid wages below the base rates are employed in large, medium and small size companies and in plants located in all parts of the country;" and that, in fixing a "locality," all these factors, as well as geographic and economic considerations, were relevant.

Page 310 U. S. 119

The majority of the Board suggested two localities, one for the Southern States and another for the remainder of the steel producing States. One member disagreed, and insisted upon four localities throughout the nation, but noted that "the Board is agreed on all the essential facts before it in the case." He recognized that

"the law . . . permits the division of the country into localities for the purpose of determining minimum wages. No rule is laid down to define the extent of any localities. . . . A too minute concept of locality would obviously nullify the law, for each plant must necessarily occupy a different locale or site from every other. To reduce the interpretation of locality to its most minute point would be to find a minimum wage prevailing in each plant. . . . When we depart from this interpretation, we are immediately thrown upon judgment. . . . Obviously we must look for wage patterns or uniformities. . . . Again, judgment must be relied upon for the answer."

Excepting to the Board's recommendations, the companies now before this Court urged that the Secretary make a finding of minimum prevailing wages with "locality" given the connotation of a subdivision of the respective States as originally provided in the Bacon-Davis Act. [Footnote 2]

On December 20, 1938, the Assistant Secretary of Labor, acting for the Secretary, heard arguments and received briefs both from industry and labor organizations. He did not adopt the recommendations of the Board in full, but instead divided the industry of the entire country into six "localities," proceeding, however, upon the view that to construe "locality" to mean small political divisions of the States, as the Bacon-Davis Act had done in express terms, would render "effective administration of the Act . . . almost impossible." It was pointed out that

Page 310 U. S. 120

"this narrowly restricted construction of the word 'locality' . . . is contrary to the administrative construction consistently adhered to by the Secretary of Labor in the administration of the Act,"

and that, while Congress had closely followed the language of the Davis-Bacon Act in some respects, it had "carefully avoided the use of the more narrowly restrictive language of city, town, village or other civil subdivision.'" In the twenty-two preceding wage determinations under this Act, the Secretary's administrative construction of the term had been -- with a sole exception -- that of geographic areas no smaller than those determined for the steel industry. [Footnote 3] The determination in question was made January 16, 1939, but was not made operative until March 1, 1938, "in order that industry may make necessary readjustments to comply with the decision."

In their bill for an injunction and a declaratory judgment, these seven producers of iron and steel (respondents here) sought to enjoin as individuals and in their official capacities, the Secretaries of the Labor, Treasury, War, Navy, and Interior Departments, the Postmaster General, the Director of Procurement of the Treasury Department, the Assistant Secretary of Labor, and the Administrator of the Division of Public Contracts of the Department of Labor and their

"officers, agents, assistants, employees, representatives and attorneys, and anyone associated with or acting in concert or participation with them, or any of them, and their successors in office and each of them, and their officers,"

etc. The seven companies named as complainants by the bill did not merely pray relief for themselves against the Secretary's wage determination, but insisted that all these

Page 310 U. S. 121

Government officials be restrained from requiring the statutory stipulation as to minimum wages in contracts with any other steel and iron manufacturers throughout the United States.

The District Court declined to interfere so sweepingly with the administration of the Act, even in the temporary restraining order which it granted. Its order ran only against the Secretaries of Labor and the Navy, and specifically limited its benefits to but three of the complaining companies. Recitals in the order indicate that only the Secretary of the Navy had actually solicited bids, and that only those three companies were "desirous of bidding." After hearing, this order was dissolved, and the Court granted a motion to dismiss the complaint for lack of jurisdiction, inadequacy of the complaint, lack of standing to sue, and because the suit was one against the United States without its consent. [Footnote 4] A stay pending appeal was denied by the District Court, but the Court of Appeals for the District of Columbia, Justice Edgerton dissenting, by temporary injunction granted the sweeping prayer that all the Government officials and agents designated in the bill be restrained from continuing in effect the Determination made by the Secretary of Labor. By motion for reargument, the restrained officials, represented by attorneys of the Government, asked that the injunction be clarified so as to be

"restricted to enjoining enforcement of the Determination against parties to this proceeding . . . , and . . . not be extended to other bidders, not parties to this action and who, for all that appears, may desire to abide by the Determination."

In the same motion, the Government asked that employees who might be irreparably injured be protected by "a bond or other security to pay the minimum wages if the appellants

Page 310 U. S. 122

do not eventually succeed in this case." [Footnote 5] The record discloses no action by the Court of Appeals on this motion or on a subsequent motion to dissolve the temporary injunction. [Footnote 6] But the temporary injunction rendering the Act wholly inoperative as to the iron and steel industry was kept in effect, and, reversing the District Court, the Court of Appeals, Justice Edgerton again dissenting, remanded with instructions that relief as prayed in the bill be granted. [Footnote 7]

Page 310 U. S. 123

In our judgment, the action of the Court of Appeals for the District of Columbia goes beyond any controversy that might have existed between the complaining companies and the Government officials. The benefits of its injunction, and of that ordered by it, were not limited to the potential bidders in the "locality," however construed, in which the respondents do business. All Government officials with duties to perform under the Public Contracts Act have been restrained from applying the wage determination of the Secretary to bidders throughout the Nation who were not parties to any proceeding, who were not before the court and who had sought no relief.

As a result of this judicial action, Federal officials had no feasible alternative except to make contracts for imperatively needed supplies for the War and Navy Departments without inclusion of the stipulation which Congress had required. The Public Contracts Act, so far as the steel industry is concerned, has been suspended for more than a year, with no bond or security to protect the public's interest in the maintenance of wage standards contemplated by Congress, should the suspension ultimately appear unwarranted or unauthorized. Here, and below, the Government has challenged the right of the judiciary to take such action, alleging that it constitutes an unwarranted interference with deliberate legislative policy and with executive administration vital to the achievement of governmental ends at the instance of parties whose rights the Government has not invaded and who have no standing in court to attack the Secretary's determination. The manifestly far-reaching importance of the questions thus raised prompted us to grant certiorari. [Footnote 8]

Of the six "localities" into which the Secretary's determination divided the steel industry, respondents do business in that consisting of Ohio, Pennsylvania, Delaware,

Page 310 U. S. 124

Maryland, Kentucky, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, Maine, the District of Columbia, and a part of West Virginia. [Footnote 9] Their stated grievance was that the construction given to the term "locality" by the Secretary amounted to

"a plain error of law in interpreting the Act, . . . and consequently, in purporting . . . to determine the prevailing minimum wages for persons employed in the manufacture . . . of the iron and steel industry in the six so-called 'localities' set forth in this determination, [the Secretary] acted arbitrarily and capriciously and wholly without warrant or authority in law."

In particular, the complaint alleged --

Respondents had been selling their products to agents of the United States for many years; they wished to continue to bid on Government contracts; their minimum wages had ranged from 53

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