Charles Evans Hughes

“ Like the lower court, I think no good reason exists for making special exception of issues of fact bearing upon a constitutional right. The inexorable safeguard which the due process clause assures is, not that a court may examine whether the findings as to value or income are correct, but that the trier of the facts shall be an impartial tribunal; that n finding shall be made except upon due notice and opportunity to be heard; that the procedure at the hearing shall be consistent with the essentials of a fair trial ”

“ Moreover, argument based on the analogy of the review of statutes fails to note the distinction between determinations of fact made in a quasi judicial proceeding surrounded by all the safeguards which attend trials by a court, and assumptions, or conclusions, as to facts made by a Legislature on information which lacks those safeguards. It fails to note also the subsidiary character of the issue involved in a finding of value or income; and that it is only as to these subsidiary issues that finality of the finding is asserted here. ”

“ Legislative declaration or finding is necessarily subject to independent judicial review upon the facts and the law by courts of competent jurisdiction to the end that the Constitution as the supreme law of the land may be maintained. Nor can the Legislature escape the constitutional limitation by authorizing its agent to make findings that the agent has kept within that limitation. Legislative agencies, with varying qualifications, work in a field peculiarly exposed to political demands. Some may be expert and impartial, others subservient. ”

“ A citizen who claims that his liberty is being infringed is entitled, upon habeas corpus, to the opportunity of a judicial determination of the facts. And, so highly is this liberty prized, that the opportunity must be accorded to any resident of the United States who claims to be a citizen. ”

“ It is said that, since regulating rates is legislation, courts must have the same power to review facts which they possess in passing on the constitutionality of statutes-otherwise the supremacy of law could be impaired by delegation to an administrative tribunal of a power to make final determinations that the legislature lacks. ”

“ In view, however, of the discussion in the court's opinion, [1] the preliminary question should be considered. The fixing of rates is a legislative act. In determining the scope of judicial review of that act, there is a distinction between action within the sphere of legislative authority and action which transcends the limits of legislative power. Exercising its rate-making authority, the Legislature has a broad discretion. It may exercise that authority directly, or through the agency it creates or appoints to act for that purpose in accordance with appropriate standards. ”

“ If there be in the record conflicting evidence as to the facts assumed, a court may not substitute its independent judgment for that of the legislative body. Mere denial of facts relied upon as conditioning the validity of legislation does not confer upon a court authority to decide what is called the truth; that is, the absolute existence in reality of facts alleged. 'Where the constitutional validity of a statute depends upon the existence of facts, courts must be cautious about reaching a conclusion respecting them contrary to that reached by the Legislature ”

“ Our decisions tell us specifically that the final ascertainment of the facts regarding value or income may be submitted by Congress, or state legislatures, to an administrative tribunal, even where the constitutionality of the taking depends upon the value of the property or the amount of the net income. Thus:
(a) No taking of property by eminent domain is constitutional unless just compensation is paid. But in condemnation proceedings the value of the property, and hence the amount payable therefor, need not be determined by a court. ”

“ Surely all must agree with the Secretary of Agriculture that: 'If rate regulation is to be effective, there must come at some time an end of hearings and a decis on of the questions involved.' In Chicago, Burlington & Quincy Ry. v. Babcock, 204 U.S. 585, 598, 27 S.Ct. 326, 329, 51 L.Ed. 636, we said of valuations made by the state board of equalization and assessment: 'Within its jurisdiction, except, as we have said, in the case of fraud or a clearly shown adoption of wrong principles, it is the ultimate guardian of certain rights. ”

“ Is there anything in the Constitution which expressly makes findings of fact by a jury of inexperienced laymen, if supported by substantial evidence, conclusive, that prohibits Congress making findings of fact by a highly trained and especially qualified administrative agency likewise conclusive, provided they are supported by substantial evidence?' 11 F.Supp. ”

“ Under our system there is no warrant for the view that the judicial power of a competent court can be circumscribed by any legislative arrangement designed to give effect to administrative action going beyond the lmits of constitutional authority. This is the purport of the decisions above cited with respect to the exercise of an independent judicial judgment upon the facts where confiscation is alleged. The question under the Packers and Stockyards Act is not different from that arising under any other act, and we see no reason why those decisions should be overruled. ”

“ The Secretary found that, despite this limitation, appellant in practice had imposed the charge on other resales, if they did not involve livestock 'to go to the country'; that is, bought by farmers to be fed. The government's contention is that the practice lacked uniformity. The Secretary concluded that to impose the charge on resales in the commission division, but not on those in the traders division or elsewhere in the yard, was unreasonable and constituted an unjust discrimination. Appellant insists that the Secretary overestimated the income from this source by $20,803. ”

“ The decisions by the reviewing court on the correctness of many of these determinations must depend upon its judgment as to the credibility of the witnesses. For instance, the company insists, as to the land in one zone, that it is worth, on the average, 25 cents per square foot. The Secretary found it was worth 16 cents. On that issue five witnesses testified.
This case, like a laboratory experiment, presents the task of rate regulation in its simplest form. The rates to be regulated are but few in number. ”

“ They include detailed findings with respect to the services rendered by appellant and its rates, the used and useful character of appellant's property, the valuation of used and useful land, the value of appellant's structures on the basis of cost of reproduction new less depreciation, working capital, going concern value, fair value on the basis of the facts found, fair rate of return, reasonable operating expenses (including repairs, depreciation and taxes) , necessary revenue, and volume of business. ”

“ But this judicial duty to exercise an independent judgment does not require or justify disregard of the weight which may properly attach to findings upon hearing and evidence. On the contrary, the judicial duty is performed in the light of the proceedings already had and may be greatly facilitated by the assembling and analysis of the facts in the course of the legislative determination. Judicial judgment may be none the less appropriately independent because informed and aided by the sifting procedure of an expert legislative agency. ”

“ Ames is adhered to, there is the greater need of applying to cases in which rate regulation is alleged to be confiscatory the rule of reason under which the Court has sanctioned, in other cases of taking, the legislative provision giving finality to quasi judicial findings of value and income by administrative tribunals. ”

“ Appellant contends, however, that the Secretary and the District Court erred in saying that appellant's claim is based wholly upon the testimony of this witness. Appellant strongly relies upon the fact that on the first hearing the Secretary made an allowance of $300,000 for going concern value and that in his answer in the first suit he denied that no evidence upon that subject had been offered on the Secretary's behalf, but, on the contrary, stated that much evidence was introduced by the Secretary tending to show the value of that element. ”

“ Appellant challenges the correctness of the computation and says that it rests upon an erroneous assumption that 'order buyers' would pay a resale charge. The government insists that the criticism is unjustified and points to evidence which is said to demonstrate conclusively that the Secretary's figures as to resales and reweighs are correct, and that appellant's argument is based on an application of the prescribed rates to 'the wrong volume.' It is unnecessary to recite the evidence. We think the government substantiates its point. ”

“ We think that appellant's witnesses failed to give proper heed to this principle. Their testimony indicates that they did not consider simply the availability of the land for all uses and purposes, including its availability for a stockyard, but attached special weight to the actual and profitable public use. They apparently included in their estimates an increment of value, by virtue of that use, which is inadmissible in a proceeding to determine the reasonable rates to be charged for the public service. ”

“ The 'Transit House' is a commercial hotel (occupying 15,805 square feet of land) with a limited patronage supplied by shippers and drivers of trucks. Appellant claims that the land and building are worth $120,143. Appellant points to the ruling of the Secretary in the first proceeding that the hotel should be considered a part of the used and useful propererty in the stockyards service. ”

“ Appellant's revenue is derived from yardage charges, from the sale of feed and bedding, and from special services. The Secretary made no change in the charges for miscellaneous services, such as loading and unloading, dipping and spraying, cleaning and disinfecting, etc. The revenue from these services was estimated at $90,500. The profit on sales of feed and bedding was estimated at $82,800. The yardage revenues are derived from charges (1) for yarding livestock arriving fresh from the country; (2) for yarding livestock resold or reweighed for purpose of sale ”

“ In that entire period, by the computation of the government which does not seem to be controverted, there had been charged against the depreciation reserve for retirements only about $116,405, of which about $103,500 were for retirements in the period 1922 to 1932, inclusive. The government contends that the structural property in the pen areas, embracing pens, fences, runways, and other yard structures, had been kept in proper operating condition principally by ordinary repairs and piecemeal replacements. ”

“ The hearing itself occupied five months, and resulted in a record of 16,168 pages. The record on the first appeal to this Court consisted of seven large volumes. The record of the additional evidence on the second appeal to this Court filled nine volumes; and the appellant's brief here, with appendix, nearly 700 pages.
The investigation of rates for Chicago continues. On July 10, 1934, the commission asked the company to show cause why its rates should not be reduced. ”

“ It has inquired into the character of the administrative tribunal provided and the incidents of its procedure. Compare Humphrey's Executor v. United States, 295 U.S. 602, 608, 55 S.Ct. 869, 79 L.Ed. 1611. And, where that prescribed for the particular class of takings appeared 'appropriate to the case, and just to the parties to be affected,' and 'adapted to the end to be attained,' Hagar v. ”

“ The latter spent over a year and a half preparing its case for presentation to the commission at a cost, including a new appraisal and inventory, of more than $1,200,000. Hearings are now in progress.
For the history of the investigation and litigation, see in this Court, Smith v. Illinois Bell Tel. Co., 269 U.S. 531, 46 S.Ct. 22, 70 L.Ed. 397; Id., 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255; Ex parte Smith, 283 U.S. 794, 51 S.Ct. 482, 75 L.Ed. 1419; Smith v. Illinois Bell Tel. Co., 283 U.S. 808, 51 S.Ct. 646, 75 L.Ed. 1427; Lindheimer v. Illinois Bell Tel. ”