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U.S. Supreme Court

Tagg Bros. & Moorhead v. United States, 280 U.S. 420 (1930)

Tagg Bros. & Moorhead v. United States

No. 45

Argued October 23, 1929

Decided February 24, 1930

280 U.S. 420


1. The Packers and Stockyards Act of August 15, 1921, § 301, declares that persons engaged in the business of buying and selling in interstate commerce livestock at a stockyard on a commission basis are "market agencies." Section 310 provides that, whenever, chanrobles.com-red

Page 280 U. S. 421

after a full hearing, the Secretary of Agriculture is of opinion that any rate "of a stockyard owner or market agency" is unreasonable, he may (a) fix the charge to be thereafter observed and (b) make an order that "such owner or operator" shall not thereafter "collect any rate or charge for the furnishing of stockyard services other than the rate or charge so prescribed." Held, construing these with other provisions of the Act, and with regard to its legislative and executive interpretation, that market agencies are within § 310(b), the term "operator" being an apt designation of such an agency. P. 280 U. S. 435.

2. The market agencies at the Omaha Stockyards are owned by corporations, partnerships, and individuals, distinct from the corporation owning the stockyards. Their specific work does not require them to invest much capital, but involves the use of space and facilities in the stockyards, the charges for which, paid to the stockyards corporation, are ultimately borne by their customers. They perform an indispensable service as brokers in the buying and selling of livestock in interstate commerce, enjoy a substantial monopoly of that business at the Omaha yards, and, by agreement among themselves, have fixed uniform rates for their services, regardless of differences in experience, skill and industry.


(1) The rates of such market agencies are subject to regulation, under authority of Congress, to prevent their services from becoming an undue burden upon, or obstruction of, interstate commerce. Pp. 280 U. S. 436-439.

(2) Such regulation is not an attempt to fix wages or limit anyone's net income, and does not violate the due process clause. P. 280 U. S. 439.

(3) The mere division of the stockyard services between the stockyards corporation and the market agencies does not deprive Congress of a power of regulation which it otherwise would have had. P. 280 U. S. 438.

(4) There is nothing in the nature of monopolistic personal services which makes it impossible to fix reasonable charges therefor, and there is nothing in the Constitution which limits the government's power of regulation to businesses which employ substantial capital. Id.

(5) Whether a business is affected with a public interest depends not upon the amount of capital it employs, but upon the character of the service which those who are conducting it engage to render. P. 280 U. S. 439. chanrobles.com-red

Page 280 U. S. 422

3. A notice from the Secretary of Agriculture informing market agencies of a hearing to be held under Title III of the Packers and Stockyards Act to inquire into the reasonableness of a new Schedule of rates, which had been filed by them and had been suspended, and apprising them that they would have "the right to appear and show cause why a further order in respect of the said schedule of rates and charges should not be made" pursuant to Title III held sufficient to put such respondents on notice that rates lower than those in either the proposed or the existing schedules might be fixed by the Secretary under §§ 306(e) and 310 upon the evidence to be adduced at the hearing. P. 280 U. S. 439.

4. Evidence before the Secretary of Agriculture held sufficient to support his findings and conclusion relative to the reasonableness of the rates of market agencies. P. 280 U. S. 440.

5. Mere admission by an administrative tribunal of matters which, under the rules of evidence applicable to judicial proceedings, would be deemed incompetent, or mere error in reasoning upon evidence adduced, does not invalidate an order made by it. P. 280 U. S. 442.

6. An order fixing rates of market agencies under the Packers and Stockyards Act must be set aside if it rests upon an erroneous rule of law, or is based upon a finding made without evidence, or upon evidence which clearly does not support it. But the order here assailed is not subject to these infirmities. Id.

7. A failure of the Secretary of Agriculture to give due notice of a hearing on such rates would be ground only for setting aside the resulting rate-fixing order as having been made irregularly; it would not justify trying in court, upon new evidence, issues respecting the merits of the order. Id.

8. A proceeding under § 316 of the Packers and Stockyards Act is a judicial review, not a trial de novo. P. 280 U. S. 443.

9. In such review, the validity of the order of the Secretary must be determined upon the record of the proceedings before him, save as there may be an exception of issues presenting claims of constitutional right. On all other issues, his findings must be accepted as conclusive if the evidence before him was legally sufficient to sustain them and there was no irregularity in the proceeding. Id.

10. It is within the power of the Secretary, and it is his duty, to modify his order if new evidence warrants the change. A rate order is not res judicata. P. 280 U. S. 445.

11. Whether new evidence may be taken in the court reviewing the order, on the issue of confiscation, is a question of practice not chanrobles.com-red

Page 280 U. S. 423

necessary to be determined where the claim of confiscation is not sustained by the evidence a received by the Secretary or as added to in the court. P. 445.

29 F.2d 750 affirmed.

Appeal from a final decree of the district court, of three judges, in a suit under the Packers and Stockyards Act to enjoin the enforcement of an order of the Secretary of Agriculture prescribing a tariff of maximum charges for the services of market agencies at the Omaha Stockyards. The decree dissolved an interlocutory injunction and dismissed the bill. chanrobles.com-red

Page 280 U. S. 431


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