The opinion of the court was delivered by: LASKER
By the present motion,
plaintiffs seek summary judgment declaring invalid a regulation promulgated under Section 291c(e) (2) of the Hill-Burton Act, 42 U.S.C. § 291 et seq. Plaintiffs assert, first that three provisions of the regulation, 42 C.F.R. § 53.111, are invalid because of inconsistency with the governing statute. Second, they argue that the regulation is invalid in its entirety because of the role performed in its adoption by the Federal Hospital Council ("the Council"). Since finding for plaintiffs on the latter ground would make consideration of the former unnecessary, we discuss it first.
Plaintiffs claim that the method of adoption of the regulation is unconstitutional because the role accorded the Council by the statute is an improper delegation of legislative power
violating Article I, Section 1 of the United States Constitution. The Act provides:
"The Surgeon General [whose functions have been transferred to the Secretary of Health, Education and Welfare], with the approval of the Federal Hospital Council and the Secretary of Health, Education and Welfare, shall by general regulations prescribe
(e) that the State plan shall provide for adequate hospitals and other facilities for which aid under this part is available, for all persons residing in the State, and adequate hospitals (and such other facilities) to furnish needed services for persons unable to pay therefor. Such regulations may also require that before approval of an application for a project is recommended by a State agency . . . for approval under this part, assurance shall be received by the State from the applicant that . . . (2) there will be made available in the facility or portion thereof to be constructed or modernized a reasonable volume of services to persons unable to pay therefor, but an exception shall be made if such a requirement is not feasible from a financial veiwpoint." 42 U.S.C. § 291c.
Plaintiffs argue that the requirement of Council approval before the Secretary of Health, Education & Welfare ("the Secretary") can promulgate regulations as unconstitutional, because it delegates legislative power to a private body not subject to the control either of Congress or the Secretary.
The Council consists of the Secretary, as chairman, and twelve members appointed by him, of whom six must be "persons who are outstanding in fields pertaining to medical facility and health activities" and "the other six members shall be appointed to represent the consumers of services provided by such facilities and shall be persons familiar with the need for such services in urban or rural areas." 42 U.S.C. § 291k(a). Regulations under § 291c cannot be passed without the Council's approval, giving it a veto power over regulations proposed by the Secretary. The Council's role is not limited in practice to approving the regulations submitted to it by the Secretary. It appears that the three provisions which plaintiffs contest (and which we discuss below) were added on the Council's initiative over the opposition of the Secretary. (Plaintiffs' Statement of Material Facts.) Of course, the final say as to a regulation's adoption rests with the Secretary. However, the issuance of regulations apparently comes about through a process of compromise between the Secretary and the Council.
Plaintiffs argue that this system violates the Constitution by placing the power of decision in the hands of a body which is not composed of government employees, but (in some instances) of persons likely to represent the interests of those whose activities are to be regulated, that is, hospitals receiving Hill-Burton grants. They rely primarily on Carter v. Carter Coal Co., 298 U.S. 238, 56 S. Ct. 855, 80 L. Ed. 1160 (1936), in which the Court said that granting to a majority of coal producers and miners the power to set maximum hours of labor constituted "legislative delegation in its most obnoxious form; for it is not even delegation to any official or an official body, presumptively disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business" (id. at 311, 56 S. Ct. at 873). Whatever validity Carter may still have for the grant of uncontrolled rule-making power to a private body, we think it has no applicability to the present case, where final control over issuance of the regulations remains in the hands of a public official.
The question presented by plaintiffs is not a novel one and we think that the result we reach is mandated by decisions of the Supreme Court, particularly Currin v. Wallace, 306 U.S. 1, 59 S. Ct. 379, 83 L. Ed. 441 (1939), United States v. Rock Royal Co-operative, Inc., 307 U.S. 533, 59 S. Ct. 993, 83 L. Ed. 1446 (1939) and Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S. Ct. 907, 84 L. Ed. 1263 (1940).
In Currin, the Court upheld a statute which limited the Secretary of Agriculture's power to designate tobacco markets which would be subject to his control, by requiring approval of market designations by a referendum of two-thirds of the tobacco growers. The Court said:
"So far as growers of tobacco are concerned, the required referendum does not involve any delegation of legislative authority. Congress has merely placed a restriction upon its own regulation by withholding its operation as to a given market 'unless two-thirds of the growers voting favor it. ' . . . This is not a case where a group of producers may make the law and force it upon a minority (see Carter v. Carter Coal Co., 298 U.S. 238, 310, 318 [56 S. Ct. 855, 872, 80 L. Ed. 1160]) . . . . Here it is Congress that exercises its legislative authority in making the regulation and in prescribing the conditions of its application. The required favorable vote upon the referendum is one of these conditions." 306 U.S. at 15-16, 59 S. Ct. at 387.
The shoe fits here. The Council does not itself make regulations. Only the Secretary has that power, a power which is conditioned on the approval of the Council in the same way as the Secretary of Agriculture's power in Currin was conditioned on the vote of a majority of tobacco growers.
In Rock Royal Co-operative, a similar problem was discussed and a parallel result reached:
"Under . . . the Act it is provided that any order shall become effective . . . if . . . the issuance of the order is approved by two-thirds of the producers interested or by interested producers of two-thirds of the volume . . . . The objection is made that this is an unlawful delegation to producers of the legislative power to put an order into effect in a market. In considering this question, we must assume that the Congress had the power to put this Order into effect without the approval of anyone. Whether producer approval by election is necessary or not, a ...