By Gordon Hull
I’ve been pursuing (first, second) what it means for standing law – basically, the determination that someone has a case that can be addressed by an Article III court – to require that plaintiffs show an “injury in fact,” a requirement that emerged suddenly in the Supreme Court’s Data Processing decision in 1970. The requirement is at considerable odds with the caselaw before it, and it has puzzled commentators. Last time, I looked at the Supreme Court’s first use of the term, an early 19th Century case called Hepburn and Dundas v. Auld. There I suggested that the court’s application of the term to a contract – looking for whether someone suffered harm, outside of the bare violation of a contract terms – wasn’t unlike what the Data Processing court seemed to be doing, in arguing that plaintiffs could demonstrate either legal injury (because of statutory violation) or harm of some other sort (injury in fact). Here I want to dig into some of the earlier caselaw; what I think that caselaw establishes is that the concept of “injury in fact” generally works to emphasize material harm, as opposed to some sort of statutory or “merely” legal injury. That sort of contrastive usage isn’t enormously common, but I do think it’s pretty consistent.
There’s three areas where you could talk about this – older cases, regulatory cases, and those relating to the Administrative Procedure Act (APA). I’ll look at the first two this time, and divide them into Supreme Court and lower court decisions.
(a) Supreme Court cases
The injury in fact terminology is extremely rare in Supreme Court cases prior to 1970 – aside from Auld, there’s two candidates. In one, FTC v. Morton Salt (1948), the term shows up in the headnotes but not the case, though the concept is there. The case concerned an unfair competition law that prohibited offering bulk discounts. Morton offered better prices on its salt to those who purchased a lot of it, which meant that a few large, national grocery chains got to buy it cheaper than everybody else. The FTC action was on behalf of small grocers, who alleged unfair competition. The Court ruled that Congress definitely wanted to address this sort of pricing strategy, and that plaintiffs only needed to show potential of competitive threat (“reasonable possibility of injury to competition”), not actual injury – otherwise the act would be unenforceable because of the burden of proof it would put on plaintiffs.
The other mention, Kernan v. American Dredging (1958) is closer. The case involved a maritime accident in which a seaman was burned to death. The Court explains:
“The seaman lost his life on the tug Arthur N. Herron, which, on the night of November 18, 1952, while towing a scow on the Schuylkill River in Philadelphia, caught fire when an open-flame kerosene lamp on the deck of the scow ignited highly inflammable vapors lying above an extensive accumulation of petroleum products spread over the surface of the river. Several oil refineries and facilities for oil storage, and for loading and unloading petroleum products, are located along the banks of the Schuylkill River. The trial court found that the lamp was not more than three feet above the water. Maintaining the lamp at a height of less than eight feet violated a navigation rule promulgated by the Commandant of the United States Coast Guard. The trial court found that the vapor would not have been ignited if the lamp had been carried at the required height” (427-8).
The question was about liability. The 8-foot rule was intended to aid in navigation, and the case in question involved no issue of navigation. Was a violation of a navigation regulation sufficient to establish liability for a non-navigational injury? Following its construction of the statutes at issue and its own precedents, the Court summarizes and resolves the issue as follows:
“Among the refinements developed by the common law for the purpose of limiting the risk of liability arising from wrongful conduct is the rule that violation of a statutory duty creates liability only when the statute was intended to protect those in the position of the plaintiff from the type of injury in fact incurred. This limiting approach has long been discarded from the FELA. Instead, the theory of the FELA is that where the employer's conduct falls short of the high standard required of him by this Act, and his fault, in whole or in part, causes injury, liability ensues. And this result follows whether the fault is a violation of a statutory duty or the more general duty of acting with care, for the employer owes the employee, as much as the duty of acting with care, the duty of complying with his statutory obligations” (438-9).
That is, violation of the 8-foot rule was sufficient to establish liability, even if the rule was designed to solve another problem. The injury in fact language doesn’t seem technical here at all, though, again, the concept more-or-less is, insofar as the question is whether a material harm (the injury in fact) aligns with a statutory or other legal obligation.
(b) Lower Courts
Appellate uses are also uncommon, but they pick up considerably with the rise of the regulatory state. The first case that both uses the phrase “injury in fact” and does so in a more technical sense (rather than a general “whether an injury in fact occurred,” meaning whether an injury of any sort occurred, or not) appears to be a defamation case where a Tennessee District Court not notes that in some civil actions “no injury in fact to the victim's reputation is really required to support the civil action, but only in theory” (Warnock v. Mitchell, 43 F. 428, 431 (1890). This is the same material harm vs legal harm that we see in the other cases. (There’s some extremely helpful 19c state defamation state cases that I’ll talk in a future post.)
A 2nd Circuit case from 1933, Scheffler v. Moran Towing & Transp. Co., also gets at the topic, albeit obliquely. In it, the cook on a tugboat was injured when he was substituting for an absent deckhand. He sued on the grounds that the short-staffed boat wasn’t seaworthy, and so the owner (not him) assumed the risk for the injury. Judge Learned Hand explains that “if liability for unseaworthiness depends alone upon the causal relation of the fault to the injury, it existed here. The libellant would have been aft, had the deckhand been present, and would not have caught his foot; the short-handedness of the tug was the cause of the injury in fact” (68 F.2d 11 (1933)). He then rules that this case “The libellant knew when the tug left that morning that he would be compelled to handle the lines for the absent deckhand, as he had done before. So far as this exposed him to any greater danger than in his usual place aft, he acquiesced in the risk. This fulfills all the elements of an assumption of risk and prevents his recovery.” (12). In other words, the injury in the sense of harm is to be cognizable or not depending on the legal determination of assumption of risk.
More relevant to regulatory law is a 1939 case, Yankee Network, Inc. v. FCC. In it, the FCC had granted a permit, and competitor stations filed suit to block it. Most of the case is about the procedures governing appeal of agency decisions, but at one point the court notes the FCC’s claim that “even if destructive economic competition may constitute a sufficient basis for contest on appeal, the appellant has failed to show any such injury in fact” (107 F.2d 212, 225 (1939)). In another case, this time about a loan association converting from federal to state charter, the 3rd Circuit ruled that “the [objecting federal] Board's position is not supported either by a showing of deception and injury in fact or by a showing that notice as given has failed to comply with any stated or formal requirement of law. We find no merit in it” (Federal Home Loan Bank Board v. Greater Delaware Valley Federal Sav. & Loan Asso., 277 F.2d 437, 441 (1960)).
Another price discrimination case, following Morton Salt, is even more apposite. In Whitaker Cable Corp. v. FTC (1956), it, the court ruled that potential injury to competition was sufficient to sustain a cease-and-desist order. Citing the Supreme Court’s Corn Products v. FTC, the court noted that the unfair competition statute “does not require a finding that the discriminations in price have in fact had an adverse effect on competition. The statute is designed to reach such discriminations 'in their incipiency,' before the harm to competition is effected. It is enough that they 'may' have the prescribed effect” (239 F.2d 253, 254). It then notes that:
“This is not to say, however, that the Commission may never lose its case by failing to introduce evidence of injury in fact. In view of the statutory language of Section 2(a) and the well settled construction thereof that Section 2(a) does not require a finding that the discriminations in price have in fact had an adverse effect on competition, we take petitioner's contention in this regard as one that, on the facts of this case and particularly in light of the direct testimony by some of petitioner's purchasers that they had not lost sales because of petitioner's pricing policies, the Commission was not justified in disregarding this direct evidence and basing its finding of probable injury on inference” (254-5).
The Court then looks at the magnitude of the price discrimination and concludes that the Commission’s action was easily justified, notwithstanding the testimony presented; “it is rather tenuous to argue that because particular purchasers did not lose sales notwithstanding the disparate prices charged by petitioner, there can be no finding of probable injury to competition” (255).
Finally, I’ll note the usage shows up in a 1967 5th Circuit case on racial discrimination in voting. In it, the Black plaintiff stood for a special election, but not only were Black voters denied entrance to “whites only” voting booths, but there was considerable evidence of intimidation – not only were large numbers of white people threatening Black voters, but Black voters who persisted in trying to vote were arrested. In working towards demanding a redo of the special election, the Court noted a parallel with “jury-race exclusion cases, [in which] once the evidence, either direct or by inference from statistical percentages, establishes the existence of racial discrimination, the law requires that the indictment (or the petit jury verdict of guilty) be set side even though the accused is unable to demonstrate injury in fact.” (Bell v. Southwell, 376 F.2d 659, 662-3 (1967)).
Next time, I’ll look at a couple of APA cases. These get at the issues in question in Data Processing, and whether its ruling is out of the blue: not only do they directly talk about standing, they also get into a scholarly debate on the interpretation of the APA.
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