All five members of the Federal Trade Commission (FTC) heard
oral argument in this case involving alleged violations by
respondent of § 2(c) and § 2(d) of the Clayton Act, as amended by
the Robinson-Patman Act. Two Commissioners resigned before the FTC
rendered its decision, and a new Commissioner taking office in the
interim declined to participate. The three participating
Commissioners concurred that respondent had violated § 2(d), but
only two agreed that it had violated § 2(c). A three-judge panel of
the Court of Appeals upheld the FTC's cease and desist order
relating to the § 2(d) violation but refused to enforce the order
relating to the § 2(c) violation, holding that, absent contrary
statutory authority, three members of a five-member commission had
to concur before their order could bind the commission. The court
en banc sustained the panel decision. The Federal Trade Commission
Act does not specify the number of Commissioners who may constitute
a quorum. An FTC rule provides for a quorum of three
Commissioners.
Held:
1. Absent a contrary statutory provision, the common law rule
applies: a majority of a quorum which constitutes a simple majority
of a collective body may act for the body. Pp.
389 U. S.
183-184.
2. The FTC is empowered to follow the common law rule, since the
Federal Trade Commission Act neither expressly nor impliedly
reflects a contrary declaration and none is to be inferred by other
congressional action. Pp.
389 U. S.
185-190.
358 F.2d 224, 234, reversed in part and remanded.
Page 389 U. S. 180
MR. JUSTICE BRENNAN delivered the opinion of the Court.
The question in this case is whether an enforceable cease and
desist order of the Federal Trade Commission requires the
concurrence of a majority of the full Commission, or only of a
majority of the quorum that participated in the decision to issue
the order.
The Commission has five Commissioners, 15 U.S.C. § 41. [
Footnote 1] A full Commission heard
oral argument in this case involving a complaint that respondent
made payments in lieu of brokerage in violation of § 2(c) of the
Robinson-Patman Act and granted promotional allowances in violation
of § 2(d) of that Act. 15 U.S.C. §§ 13(c) and (d). Two
Commissioners retired before the Commission rendered its decision.
Although one vacancy was filled in the interim, only three
Commissioners participated in the decision because the new
Commissioner, not having heard the oral argument, declined to
participate. All three participating Commissioners concurred that
respondent granted promotional allowances in violation of § 2(d).
However, only two of the three concurred that respondent also made
payments in lieu of brokerage in violation of § 2(c). On petition
for review under 15 U.S.C. § 21(c) and 45(c), a three-judge panel
of the Court of Appeals for the Ninth Circuit enforced the
Commission's cease and desist order as it related to the § 2(d)
violation but refused to enforce the order, one judge dissenting,
as it related to the § 2(c) violation. In refusing to enforce the §
2(c) part of the order, the Court of Appeals held that,
"absent statutory authority or instruction to the
Page 389 U. S. 181
contrary, three members of a five member commission must concur
in order to enter a binding order on behalf of the commission."
358 F.2d 224, 228. [
Footnote
2] On rehearing en banc, the full court sustained the panel
decision five to four. 358 F.2d at 234. Because of a conflict with
decisions of other courts of appeals,
see Atlantic Refining Co.
v. FTC, 344 F.2d 599 (C.A. 6th Cir.),
LaPeyre v. FTC,
366 F.2d 117 (C.A. 5th Cir.), we granted certiorari, 386 U.S. 1003.
We reverse.
The Federal Trade Commission Act does not specify the number of
Commissioners who may constitute a quorum. [
Footnote 3] A quorum of three Commissioners is provided
for by a rule of the Commission first promulgated in 1915; in its
current version, it is Rule 1.7. [
Footnote 4] No challenge
Page 389 U. S. 182
to the authority of FTC to promulgate Rule 1.7 is made in this
case; indeed, the Court of Appeals expressly disclaimed any ". . .
doubt as to the validity of the Commission's practice of conducting
hearings before less than the full membership," 358 F.2d at 230.
Before us for review, therefore, is only the holding of the Court
of Appeals which follows that disclaimer:
"We say only that an order of the Commission must be supported
by three members in order to constitute an enforceable order of the
FTC. Two of five is too few."
Ibid.
The rationale of the Court of Appeals was that the FTC could act
only on the concurrence of a majority of the full Commission
"absent statutory authority or instruction to the contrary." 358
F.2d at 228. The court cited no authority affirmatively supporting
that proposition; the court simply rejected -- on the ground that
it is inapplicable to "a statutorily created administrative
tribunal like the Federal Trade Commission," 358 F.2d at 229 -- the
rule stated by the Court of Customs and Patent Appeals in
Frischer & Co. v. Bakelite Corp., 39 F.2d 247, 255,
that ". . . in collective bodies other than courts, even though
they may exercise judicial
Page 389 U. S. 183
authority, a majority of a quorum is sufficient to perform the
function of the body." [
Footnote
5] Further, the court rejected as "a bare conclusion" the
holding of the Court of Appeals for the Sixth Circuit in
Atlantic Refining Co. v. FTC, supra, that a majority of a
panel of three Commissioners could act for the Commission.
Insofar as the Court of Appeals' holding implies that the
proposition stated by it is the common law rule, the court was
manifestly in error. The almost universally accepted common law
rule is the precise converse -- that is, in the absence of a
contrary statutory provision, a majority of a quorum constituted of
a simple majority of a collective body is empowered to act for the
body. [
Footnote 6] Where the
enabling statute is silent on the question,
Page 389 U. S. 184
the body is justified in adhering to that common law rule.
Respondent does not undertake to support the Court of Appeals'
proposition as stated. Rather respondent concedes that the common
law rule is as we have stated it to be, but argues that an
exception allegedly recognized at common law in the case of courts
should be applied to an agency like the FTC exercising
quasi-judicial functions; respondent cites the statement
in
Frischer, supra, at 255, that
"[w]here courts are concerned, it has been uniformly held, so
far as we can ascertain, that a clear majority of all the legally
constituted members thereof shall concur or no valid judgment may
be entered except such as may follow no decision."
But even on the doubtful premise that there is an exception in
the case of courts, [
Footnote
7] Frischer itself recognized, as we have seen, that
Page 389 U. S. 185
the exception does not apply to administrative agencies with
quasi-judicial functions.
Ibid. [
Footnote 8] It follows that the FTC is not
inhibited from following the common law rule unless Congress has
declared otherwise. Since that declaration is not expressed in the
Trade Commission Act, our task is narrowed to determining whether
it may be read in by implication.
The Court of Appeals' opinion may be read as having found an
implicit contrary declaration because Congress wrote the common law
rule into later statutes creating other agencies:
". . . when Congress wanted to authorize the exercise of the
powers of an administrative body by less than the full body in
other situations, it did not lack the words to do so expressly.
Cf. National Labor Relations Board, 29 U.S.C. § 153(b);
Interstate Commerce Commission, 49 U.S.C. § 17(1) [
sic];
Federal Power Commission, 16 U.S.C. § 792,"
358 F.2d at 229. [
Footnote
9] However,
Page 389 U. S. 186
in another statute, reorganizing the Federal Maritime
Commission, Congress enacted not the common law rule, but a
unanimous concurrence provision, Reorganization Plan No. 7 of 1961,
75 Stat. 840; the reasoning of the Court of Appeals thus would
equally justify an inference that Congress sanctioned the FTC's
adherence to the common law rule, since Congress has not lacked the
words to abrogate such a practice expressly. This diversity in
congressional treatment of the problem clearly forecloses reliance
upon a particular choice in one statute as the basis for an
inference of a contrary choice in another which says nothing on the
matter.
The Court of Appeals seems also to have been of the view that
there is a basis for inferring a contrary
Page 389 U. S. 187
declaration from within the four corners of the Trade Commission
Act itself.
"[I]t is difficult to believe that Congress conceived of the
five-member FTC with its politically balanced make-up, permitting
two of its members to speak for the Commission, and failed to
specifically provide enabling legislation."
358 F.2d at 229. This argument stresses the structural
characteristics of the Commission -- that it is a multi-membered
body whose members serve long, staggered terms, and no more than
three of whom may belong to the same political party. But the
argument fails to take into account the fact that these features
are common to almost all federal regulatory agencies, whose
enabling acts, where they deal at all with the question of how many
of a quorum may act for the agency, deal with it diversely. Nothing
in the structure of the FTC, therefore, commands the inference that
Congress intended to restrict the Commission to voting requirements
not normally imposed on or adered to by similarly structured
agencies.
Respondent's final argument is that there is a basis for the
inference in the action of Congress in 1961 in not disapproving the
Reorganization Plan for the Commission submitted by President
Kennedy. [
Footnote 10] Under
this plan the FTC was granted
"authority to delegate, by published order or rule, any of its
functions to a division of the Commission, an individual
Commissioner, a hearing examiner, or an employee or employee board,
including functions with respect to hearing, determining, ordering,
certifying, reporting or otherwise acting as to any work, business,
or matter. . . ."
The plan further provided
Page 389 U. S. 188
that "the Commission shall retain a discretionary right to
review the action of any such division of the Commission individual
Commissioner . . ." and that
"the vote of a majority of the Commission less one member
thereof shall be sufficient to bring any such action before the
Commission for review."
Reorganization Plan No. 4, §§ 1(a), (b). The Commission did not
purport to act pursuant to Plan No. 4 in this proceeding.
Nevertheless, respondent argues that the provision assuring a
minority of the Commission a means to compel review by the full
Commission is a congressional expression that Commission action
shall be valid only when concurred in by a majority of the full
membership. This argument is not persuasive, however. The
provisions of Plan No. 4 were common to most of the reorganization
plans submitted for other agencies at or about the same time.
[
Footnote 11] As we have
noted, the enabling acts creating those agencies treat differently
the problem of the number of a quorum authorized to act for the
agency, which makes it highly improbable that the similarly phrased
review procedures set forth in the plans manifest the implicit
principle for which respondent contends. Indeed, it is quite clear
-- both from the language of the plans and the discussions in
Congress -- that Plan No. 4 and those like it were concerned with
establishing the authority and procedure for
delegation of
functions so as to enable the respective agencies to operate more
efficiently. [
Footnote 12]
There can be little question of the desirability of the FTC's
Page 389 U. S. 189
judicious use of this authority, but the case before us is not
one in which there was a delegation. This was a proceeding
originally heard by a full Commission and the problem of a quorum
decision arose only when fortuitous circumstances reduced to three
the number of Commissioners available to render a decision.
Clearly, it is not a decision covered by the 1961 Plan.
The inconsistency in congressional treatment of quorum voting --
sometimes allowing agency action on the concurrence of a majority
of the quorum, in other cases requiring unanimous concurrence, and
in several statutes saying nothing at all -- refutes any suggestion
that Congress has regarded the problem to be such as to justify a
single rule for federal regulatory agencies. Surely, if Congress at
any time has regarded the case of the FTC as specially calling for
unanimity in quorum voting, we might expect that Congress would
have at some time addressed itself to the question during the more
than half century of the Commission's existence. [
Footnote 13] Thus, if any conclusion is to
be drawn, it is that Congress has
Page 389 U. S. 190
been and is content to acquiesce in the Commission's practice of
following the long-established common law rule.
We therefore reverse the judgment of the Court of Appeals
insofar as the matter of the Commission's § 2(c) order was
"remanded to the FTC for further proceedings to determine whether a
majority of the Commission join in the section 2(c) findings," and
remand to that court with direction to proceed to judgment on the
merits of respondent's petition to review and set aside that
order.
It is so ordered.
MR. JUSTICE MARSHALL took no part in the consideration or
decision of this case.
[
Footnote 1]
The FTC is one of the oldest federal regulatory agencies. Act of
September 26, 1914, c. 311, § 1, 38 Stat. 717, as amended, 15
U.S.C. § 41.
See generally Cushman, The Independent
Regulatory Commissions 177-228 (1941); Henderson, The Federal Trade
Commission (1924).
[
Footnote 2]
The FTC had denied a petition for reconsideration filed by
respondent urging, among other things, the invalidity of the § 2(c)
order on this ground.
See 1963-1965 CCH Trade Reg.Rep.
Transfer Binder � 17,046.
[
Footnote 3]
We do not regard the provision in 15 U.S.C. § 41 for the
exercise of powers by "the remaining commissioners" in the case of
"a vacancy" as regulating the matter of a quorum. In contrast,
except for the 1934 Act creating the Securities and Exchange
Commission, 15 U.S.C. § 78d, which is also silent, the acts
creating other major federal regulatory agencies expressly provide
how many members shall constitute a quorum.
See, e.g., 42
U.S.C. § 2031 (Atomic Energy Commission); 49 U.S.C. § 1321(c)
(Civil Aeronautics Board); 47 U.S.C. § 154(h) (Federal
Communications Commission); 16 U.S.C. § 792 (Federal Power
Commission); 46 U.S.C. § 1111, as amended (Federal Maritime
Commission); 49 U.S.C. § 17(3) (Interstate Commerce Commission); 29
U.S.C. § 153(b) (National Labor Relations Board); 50 U.S.C.App. §
1217(b) (Renegotiation Board); 19 U.S.C. § 1330(c) (United States
Tariff Commission).
[
Footnote 4]
"A majority of the members of the Commission constitutes a
quorum for the transaction of business." Rule 1.7, Procedures and
Rules of Practice for the Federal Trade Commission, as amended, 16
CFR § 1.7 (1967) (now § 6 of Statement of Organization of the FTC,
32 Fed.Reg. 8442). Although § 6 superseded Rule 1.7 as of July 1,
1967, it is identical in wording; we shall refer to the ruling as
Rule 1.7, as it was cited in the proceedings to date.
In its original version, the quorum provision was stated: "Three
members of the Commission shall constitute a quorum for the
transaction of business." 1 F.T.C. 595 (Rule adopted June 17,
1915).
See also Henderson,
supra, n 1, at 71: "The case is then set for oral
argument before the full Commission (or at least a quorum of three
members). . . ."
Three courts of appeals have expressed approval of the rule.
See Drath v. FTC, 99 U.S.App.D.C. 289, 239 F.2d 452;
Atlantic Refining Co. v. FTC, 344 F.2d 599 (C.A. 6th
Cir.);
LaPeyre v. FTC, 366 F.2d 117 (C.A. 5th Cir.).
However, both the Fifth and Sixth Circuit decisions erroneously
read the rule as providing, of itself, "for decision by the
majority of panels of three members." 366 F.2d at 122; 344 P.2d at
607.
[
Footnote 5]
The question in
Frischer was whether the United States
Tariff Commission might act on majority vote of a quorum. The
enabling act contained nothing on the subject of a quorum. 39 Stat.
795-798. The present statute provides that a majority of the
Commissioners constitutes a quorum. 19 U.S.C. § 1330(c).
[
Footnote 6]
See, e.g., Missouri Pac. R. Co. v. Kansas, 248 U.
S. 276 (1919);
United States v. Ballin,
144 U. S. 1 (1892);
Brown v. District of Columbia, 127 U.
S. 579 (1888);
Mountain States Tel. & Tel. Co.
v. People ex rel., 68 Colo. 487, 499-500, 190 P. 513, 517-518
(1920);
Martin v. Lemon, 26 Conn.192 (1857);
Kaiser v.
Real Estate Comm'n, 155
A.2d 715 (D.C.Mun.Ct.App. 1959);
Davidson v. State,
___ Ind. ___, 221 N.E.2d 814 (1966);
Louisville & Jefferson
County Planning Zoning Comm'n v. Ogden, 307 Ky. 362, 210
S.W.2d 771 (1948);
Codman v. Crocker, 203 Mass. 146, 89
N.E. 177 (1909);
Oakland v. Board of Conservation &
Dev., 98 N.J.L. 806, 122 A. 311 (1923);
Hill v.
Ponder, 221 N.C. 58, 62, 19 S.E.2d 5, 8 (1942);
Slavens v.
State Bd. of Real Estate Examiners, 166 Ohio St. 285, 141
N.E.2d 887 (1957);
Green v. Edmondson, 23 Ohio Dec. 85
(Common Pleas 1912);
Bray v. Barry, 91 R.I. 34, 41-42,
160
A.2d 577, 581 (1960);
E. C. Olsen Co. v. State Tax
Comm'n, 109 Utah 563, 570-571, 168 P.2d 324, 328 (1946); 80
Harv.L.Rev. 1589-1590 (1967); 42 N.Y.U.L.Rev. 135, 136-138 (1967).
See also Snider v. Rinehart, 18 Colo. 18, 23-24, 31 P.
716, 718 (1892); Constitution, Jefferson's Manual and Rules of the
House of Representatives, H.R.Doc. No. 529, 89th Cong., 2d Sess.,
§§ 52-57, 409, 508-510.
[
Footnote 7]
The authorities cited in
Frischer as supporting the
exception fail with one exception to do so. Four of the decisions
cited dealt simply with the rule in cases where a court is equally
divided in its vote.
Madlem's Appeal, 103 Pa. 584 (1883);
Putnam v. Rees, 12 Ohio 21 (1843);
Northern R. Co. v.
Concord R. Co., 50 N.H. 166 (1870);
Ayres v. Bensley,
32 Cal. 632 (1867). Another, in addition to dealing with the
question of an equally divided court, involved a constitutional
provision for the concurrence of a majority of the judges sitting.
Mugge v. Tate, Jones & Co., 51 Fla. 255, 41 So. 603
(1906). The others are likewise not in point.
Deglow v.
Kruse, 57 Ohio St. 434, 49 N.E. 477 (1898) (two of three
constitutes quorum, both must concur);
Denver & R. G. R.
Co. v. Burchard, 35 Colo. 539, 558, 86 P. 749, 755 (1906)
(constitutional requirement that three of seven judges concur). The
whole of the court's discussion in the only decision in point,
Johnson v. State, 1 Ga. 271 (1846), was
"[t]he law, organizing the Inferior Court, constitutes five
justices the court. We hold the concurrence of a majority of the
whole number necessary to the validity of their action."
Id. at 74. No authority was cited for this holding.
In addition, respondent cites
Paine v.
Foster, 9 Okla. 213, 53
P. 109 (1896),
9 Okla. 257, 59
P. 252 (1899). Its holding was, however, predicated on a statutory
requirement that three judges of a five-judge court must concur in
order to reverse a lower court judgment.
See 9 Okla. 257,
259, 260, 60 P. 24 (dissenting opinion).
Congress has prescribed a quorum of six Justices for this Court
but has not provided how many of the quorum can act for the Court.
28 U.S.C. § 1. Congress has, however, dealt expressly with the
latter matter in the statutes concerning the courts of appeals, 28
U.S.C. § 46(d); the Court of Claims, 28 U.S.C. § 175(f) (1964 ed.,
Supp. II), and the Court of Customs and Patent Appeals, 28 U.S.C. §
215.
[
Footnote 8]
Accord, Martin v. Lemon; Kaiser v. Real Estate Comm'n;
Louisville & Jefferson County Planning & Zoning Comm'n v.
Ogden; Oakland v. Board of Conservation & Dev.; Slavens v.
State Bd. of Real Estate Examiners; Bray v. Barry; E. C. Olsen Co.
v. State Tax Comm'n, all
supra, n 6.
[
Footnote 9]
In fact, of the three agencies cited only the ICC and NLRB have
express authority to act through a majority of a quorum; the FPC
statute simply stipulates that three of five commissioners
constitute a quorum, a statutory equivalent of the FTC rule
sanctioned by the Court of Appeals.
The Atomic Energy Commission, 42 U.S.C. § 2031, and the
Renegotiation Board, 50 U.S.C.App. § 1217(b), also are expressly
authorized to act on the majority vote of a quorum. The Federal
Maritime Commission, 46 U.S.C. § 1111, as amended by Reorganization
Plan No. 7 of 1961, on the other hand may act only on the unanimous
vote of a quorum. Like the act creating the FTC, the acts creating
the Civil Aeronautics Board, 49 U.S.C. § 1321(c), the Federal
Communications Commission, 47 U.S.C. § 154(h), the Federal Power
Commission, 16 U.S.C. § 792, the Securities and Exchange
Commission, 15 U.S.C. § 78d, and the Tariff Commission, 19 U.S.C. §
1330(c), say nothing on the subject. These latter agencies
nonetheless act on the majority vote of a quorum and in the cases
of the CAB, the FCC, the SEC, and the Tariff Commission, the
practice has been judicially approved.
Braniff Airways, Inc. v.
CAB, ___ U.S.App.D.C. ___, ___, 379 F.2d 453, 460 (dictum);
WIBC, Inc. v. FCC, 104 U.S.App.D.C. 126, 128, 259 F.2d
941, 943 (dictum);
Gearhart & Otis, Inc. v. SEC, 121
U.S.App.D.C. 186, 189, 348 F.2d 798, 801 (dictum);
Frischer
& Co. v. Bakelite Corp., supra, (Tariff Commission). In
the case of the FTC, the practice has been judicially approved in
Atlantic Refining Co. v. FTC, supra, and
LaPeyre v.
FTC, supra. The earliest FTC decision noting the practice is
apparently
Luria Bros., 62 F.T.C. 243, 646, 655, decided
in 1963. The first court challenge to the practice seems to have
been that, in 1965 in
Atlantic Refining Co. v. FTC, supra.
Cf. Forster Mfg. Co. v. FTC, 361 F.2d 340 (C.A. 1st Cir.).
See generally 35 Geo.Wash.L.Rev. 398 (1966); 80
Harv.L.Rev. 1589 (1967).
[
Footnote 10]
Reorganization Plan No. 4 of 1961, 75 Stat. 837, 15 U.S.C. § 41.
Under the Reorganization Act, 5 U.S.C. §§ 133z-1 to 133z-15, the
plan became operative when not disapproved by Congress within 60
days of its submission by the President. Resolutions to disapprove
Plan No. 4 failed to pass in both the House and the Senate. 107
Cong.Rec. 10844-10856 (House);
id. at 11721-11740
(Senate).
[
Footnote 11]
See Plan No. 1, H.R.Doc. No. 146, 87th Cong., 1st Sess.
(1961) (SEC); Plan No. 2, H.R.Doc. No. 147 (FCC); Plan No. 3,
H.R.Doc. No. 152 (CAB); Plan No. 4, H.R.Doc. No. 159 (FTC); Plan
No. 5, H.R.Doc. No. 172 (NLRB); Plan No. 7, H.R.Doc. No. 187 (FMC).
Plans 1, 2, and 5 were disapproved by Congress, 107 Cong.Rec. 10463
(No. 2);
id. at 11003 (No. 1);
id. at 13078 (No.
5). Plans 3, 4, and 7 became effective.
See 75 Stat. 837,
840.
[
Footnote 12]
See nn. 10-11,
supra.
[
Footnote 13]
It is true that the Commission's first "official" acknowledgment
of its practice of rendering two-to-one decisions apparently did
not come until 1963.
See Luria Bros., supra, n 9. Nevertheless, from the beginning, the
Commission has periodically had unfilled vacancies for significant
lengths of time, vacancies which Congress, of course, had to know
about. Thus, between June 1, 1918, and January 16, 1919, there were
two simultaneous vacancies, and there have been several single
vacancies of some duration --
e.g., September 1921 to
June, 1922, July, 1934 to August, 1935, October, 1949 to October,
1950. If, as respondent suggests, the prospect of the Commission
acting through the split decision of three Commissioners should be
so inconsistent with the nature of the Commission, it is indeed
strange that Congressmen conversant with rules of parliamentary
procedure governing voting,
see Jefferson's Manual,
supra, n 6, as well as
the methodology of judicial decision making should not in all these
years have taken steps to prevent a Commission -- reduced to three
by a double vacancy or by a single vacancy plus an abstention --
from rendering such a decision.