California v. Federal Power Commission

*491Mr. Justice Harlan, whom Mr. Justice Stewart joins,

dissenting.

In this case originating in the Federal Power Commission, the Court today announces a new and surprising antitrust procedural rule: If the Commission is asked to “proceed to a decision on the merits of a merger application when there is pending in the courts a suit challenging the validity of that [merger and its antecedent] transaction [s] under the antitrust laws,” the Commission must abstain from a determination and “await decision in the antitrust suit before taking action.” (Ante, pp. 487, 489.)

The holding does not turn on any facts or circumstances which may be said to be peculiar to this particular base. It is not limited to Federal Power Commission proceedings. Without adverting to any legal principle or statute to support its decision, the Court appears to lay down a pervasive rule, born solely of its own abstract notions of what “orderly procedure” requires, that seemingly will henceforth govern every agency action involving matters with respect to which the antitrust laws are applicable and antitrust litigation is then pending in the courts.

I cannot subscribe to a decision which broadly works such havoc with the proper relationship between the administrative and judicial functions in matters of this kind. The decision, on the one hand, in effect transfers to the Antitrust Division of the Department of Justice regulatory functions entrusted to administrative agencies, and on the other hand deprives the courts in government antitrust litigation of the authority given them by statute to determine whether or not interlocutory relief is necessary or appropriate. What this new rule entails is illustrated by this case: A business transaction of great magnitude and importance, which the Federal Power *492Commission has found to be in the public interest, is, at least for the time being, set for naught, without the slightest inquiry into whether the antitrust charges leveled against it are weighty or not. The Court’s action is the more unusual because it is taken (1) despite the antitrust court’s denial of interlocutory relief when such relief was belatedly sought by the Government; (2) in the face of the considered judgment of the Solicitor General, representing the public interests respectively involved in the administrative and antitrust proceedings, that determination of the ultimate effect of the Commission’s order should be left to abide the event of the antitrust case, and that meanwhile such order should be allowed to stand; and (3) at the instance only of an intervenor in the Commission’s proceeding which was not even a party to the Government’s antitrust suit.

The undiscriminating nature and reach of this decision become apparent when attention is focused on the procedural events occurring prior to the order of the Commission which is here under attack. On July 22, 1957, the Department of Justice instituted a civil action in the United States District Court in Utah against the El Paso Natural Gas Company and the Pacific Northwest Pipeline Company, seeking to restrain an alleged violation of § 7 of the Clayton Act. This violation was said to have occurred when, beginning in January 1957, El Paso embarked on a program of acquiring nearly all of Pacific’s outstanding common stock. The complaint asked that the purchase be declared to be a violation of § 7 of the Clayton Act and that El Paso be directed to divest itself of Pacific’s stock. No interlocutory relief appears to have been requested.

On August 7,1957, El Paso filed with the Federal Power Commission its application for authorization to merge Pacific’s assets with its own. Despite this announced intention further to intermingle the affairs of the two cor*493porations, the Government did not seek temporary relief from the District Court in Utah. El Paso, on the other hand, contended that “primary jurisdiction” with regard to the merger resided with the Commission and sought to have the antitrust action stayed. Its motion was denied by the District Court, and on March 3, 1958, we denied leave to file a petition for common-law certiorari to that decision. 355 U. S. 950.

When the case was returned to the District Court the Government again made no effort to obtain from that court an order maintaining the status quo pending the outcome of the suit. Instead, the Assistant Attorney General in charge of the Antitrust Division suggested to the Commission that it stay its own proceedings until the antitrust suit had terminated. When this request was rejected by the Commission, the Antitrust Division withdrew from the Commission proceedings despite an express invitation from the Commission that it participate.

Hearings before the Commission’s examiner were scheduled to begin on September 17, 1958, and the trial of the antitrust suit in the District Court was set for November 17, 1958. At a hearing on several pretrial matters held in the District Court on September 5 and 6, the Government, for the first time, moved for a temporary injunction to restrain the asset merger even if the Commission’s approval were forthcoming.1 That motion was denied and not renewed thereafter. The Commission’s hearings began on September 17 and were recessed on September 26 until November 12.

El Paso again moved in the District Court for a continuance of the antitrust trial until after the Commission had passed on the merger application, and the Govern*494ment once more asked the Commission to stay its proceedings pending the outcome of the antitrust case. While noting that the Government had refused the Commission’s invitation to intervene in the merger proceedings, the Commission agreed to defer to the District Court. It notified the court that if El Paso’s motion for a continuance of the trial were denied, the Commission would continue its merger proceeding to a later date. On October 13, 1958, the District Court issued an order granting El Paso’s motion and continued the antitrust trial “until the final determination by the Federal Power Commission of the applications now pending before it.” The Government has never sought to review this order by mandamus or by any other available means. The Commission subsequently held its hearings and authorized the merger of El Paso and Pacific in an order dated December 23, 1959. It is that order which the Court today in effect holds to have been entered without jurisdiction.

The Court relies on three “practical reasons” to support its perplexing conclusion that despite the Government’s failure promptly to seek relief pendente lite in the antitrust suit, its failure to press for review of the denial of such relief when belatedly sought, and the Commission’s expressed willingness to defer to the antitrust court, the Commission was nonetheless required to withhold approval of the merger application: (1) If the asset merger were approved and executed, and the stock purchase thereafter held to be illegal, an “unscrambling” involving “needless waste of time and money” would be necessary; (2) such an “unscrambling” would “raise complicated and perplexing problems on tax matters and otherwise”; (3) the Commission’s approval of the asset merger “is bound to carry momentum into the antitrust suit.” (Ante, pp. 488-489.) Whatever weight these considerations may be deemed to have, I think that “orderly proce*495dure” required their determination, at least in the first instance, by the antitrust court, if indeed they were not rejected by the District Court on the Government’s 1958 motion to enjoin consummation of the merger. Their consideration by this Court as an original matter is entirely inappropriate, and in no event do any of them affect the validity of the Commission’s order approving the merger.2

I.

Section 15 of the Clayton Act, 15 U. S. C. § 25, grants jurisdiction to the United States District Courts “to prevent and restrain violations” of the Clayton Act, and empowers the United States Attorneys “to institute proceedings in equity to prevent and restrain such violations.” The same statutory section provides that pending determination of the merits of a complaint filed by the United States “and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.” Consequently, it is the duty of the District Court before which an antitrust suit is pending to pass on the desirability of temporary relief in order to avoid later problems of “unscrambling.” In the case before us, it was not until more than a year after the Government knew of El Paso’s intention to merge Pacific’s assets with its own that it requested the District Court to enjoin the execution of *496this plan. The court’s denial of the temporary injunction must be presumed to have been based on its evaluation of the likelihood of success of the antitrust suit and of the difficulties that might arise if interlocutory relief were denied. Not having renewed its motion, the Government may surely not revive it indirectly by attacking the Commission’s order. Moreover, by what authority is petitioner, the State of California, an intervenor only in the Commission’s proceedings, empowered to assert claims relating to the enforcement of the antitrust laws that are unavailable to the Government, the plaintiff in the antitrust action?

II.

Similarly, whatever is meant by the suggestion that the Commission’s approval carries “momentum” into the antitrust suit, this factor is one that should be remedied, if necessary, by purging the antitrust proceedings of any improper influence deriving from the agency determination, not by invalidating the administrative action. The Court’s holding — wffiich is unnecessary to a decision of this case and, as the Government argues, also premature3 — that the concluding proviso of § 7 of the Clayton Act gives the Commission’s approval of this asset merger no immunizing effect against the antitrust claim, surely lends added support to the view that the agency is permitted to consider this application as it might consider any other which suggests no difficulties under the antitrust laws. If the Commission’s approval is irrelevant to the merits of the Government’s *497antitrust suit, it is the court considering the antitrust claim which should guard itself against giving weight to this irrelevancy, not the Commission passing on the merger application. And if the lower courts should ultimately go wrong in this regard, their error would be correctible in this Court.

Likewise there is little substance to the difficulty which this Court finds in a court “undoing what was done” (ante, p. 489) by the Commission. Had the antitrust trial court been fearful on that score it could have entered an appropriate interlocutory order ensuring that nothing would be done while the litigation was pending.

III.

Finally, I do not think that the record in this case justifies a conclusion that the Commission’s refusal to postpone consideration of the merger application amounted to an abuse of discretion. On the Court’s premise that the agency’s approval did not immunize the transaction from antitrust liability, the Commission’s action in granting the certificate of public convenience and necessity did no more than permit the merger to be consummated subject to all possible antitrust infirmities. And even proceeding on the Commission’s premise that the proviso of § 7 of the Clayton Act gives it the power to immunize mergers from antitrust liability, its decision to go ahead after being notified by the District Court that the motion to continue the antitrust suit had been granted could hardly be regarded as an abuse of discretion.

In conclusion, the Court’s decision in this case creates a wholly artificial imbalance between antitrust law enforcement and administrative regulation with respect to federally regulated industries. By displacing the continuing supervision of a court over such interlocutory *498terms as are “just in the premises” with an absolute rule prohibiting the regulating agency from considering applications relating to matters which are also involved in a pending antitrust suit, this decision seems to leave no room for sensible accommodation of the two sets of interests in a given instance. Neither the inflexible rule announced by the Court nor its decision on the facts of this case is supported by reason or authority.

I would affirm.

The fact that such a motion was made and denied does not appear in the record before this Court. However, it is asserted in El Paso’s brief and is not denied by any of the other parties.

Because of the posture of this case, I would not reach the question as to what weight should be given to the pendency of administrative merger proceedings by an antitrust court which is asked to grant interlocutory relief. However, I think more can be said than the Court does in favor of staying the hand of an antitrust court pending consideration by the appropriate agency of matters touching on “those areas ... in which active regulation has been found necessary to compensate for the inability of competition to provide adequate regulation.” Federal Communications Comm’n v. RCA Communications, Inc., 346 U. S. 86, 92.

Whatever may be the impact on a § 7 action of the Commission’s approval of this merger, it can be felt only in the antitrust suit. Consequently, I would, as the Solicitor General has suggested, leave this issue open for consideration in the District Court should the agency’s order be asserted as a defense in that action.