Nine—
Adjudicating the New Deal

We are stricken by no plague of locusts.
Franklin D. Roosevelt, 1933

The country was well into the Great Depression when the new judges took their seats on the court. The election of Franklin Roosevelt brought a "new deal" to the American people; it also brought a new direction to the Ninth Circuit. With the appointment of Francis Garrecht in 1933, the Democrats held a majority on the court for the first time in its history. More Democrats joined the court in the ensuing four years, until Curtis Wilbur was left as the lone Republican on a seven-member court. Although Democrats dominated, they were not all of the same mind in adjudicating issues raised by FDR's New Deal programs. The judicial battles over the legality of the president's initiatives were as spirited as any the court had seen between Erskine Ross and William Gilbert, and the stakes were as high. The severity of the Depression in the West and the unprecedented array of government programs aimed at the region combined to thrust the Ninth Circuit into the limelight. Just as the philosophical disagreements between Ross and Gilbert had affected the course of natural resource development in the West, so too differences among the 1930s-era judges influenced the region's economic recovery.

In addition to highlighting the court's place in the process of western development, the New Deal era witnessed the evolution of several critical features in the federal court system. First, by the 1930s, role specialization among the country's circuit judges was complete. The judges who took their seats on the appellate bench almost never heard trials as district judges sitting alone. And although district judges still occasionally sat on appellate panels, they did so far less frequently than had been the case

in the first four decades of the circuit courts of appeals. Second, the growth in federal law throughout the early twentieth century reached a new high in the 1930s with the promulgation of countless New Deal programs. Unlike some of the key cases in the World War I and Prohibition periods, in which the Ninth Circuit had opportunities to expound on grand constitutional themes, cases arising in the New Deal era tended to present questions of statutory interpretation with broader social effects but lesser legal significance. Once the Supreme Court had decided the constitutionality of a New Deal statute, for instance, the work of the circuit courts of appeals devolved to applying statutory analysis to the given facts. Third, in conjunction with the specialization in judicial roles, this functional change in the Ninth Circuit's work produced a very interesting dynamic: the development of a distinct politics in the court, in which substantive disagreements exposed the administrative shortcomings in fair assignment of judges to cases. By the end of the 1930s the Ninth Circuit was becoming more self-consciously political, as the next chapter will attempt to demonstrate. In this chapter the substantive foundation for that process will be laid in a review of the Ninth Circuit's role in western development in the New Deal era and the changes in the court's work that created the need for administrative reforms.

I. The Depression in the West

"We are stricken by no plague of locusts." When President Franklin D. Roosevelt launched a New Deal for the American people with these words in 1933, he meant that human solutions, not divine intervention, would lead the country out of economic troubles caused by human actions. The task did not promise to be easy. At that time, the Great Depression was three and a half years old and unemployment nationally stood at 24.9 percent. The western states were struck particularly hard. As income declined, so did consumption of products from the sale of which westerners derived their livelihoods. Ranchers suffered when per capita consumption of beef and veal fell by 10 percent between 1936 and 1939. Mining income plummeted, and oil production rose only slightly in the West throughout the 1930s.^[1]

The Depression discouraged many potential immigrants from moving to the Far West. Contrary to the images conjured up by writers and artists of Dust Bowl migrants blown westward off their Midwest and Great Plains farms, regional population grew more slowly in the 1930s than

in any other decade since the 1840s. The metropolitan communities that blossomed after World War II had been only small towns in the 1930s: Phoenix numbered 65,000 inhabitants in 1940; Tucson, 37,000; Las Vegas, 8,422. Throughout the 1930s Reno, Nevada's largest city, had only 21,000 residents. The population of the great Pacific Coast cities of San Francisco, Los Angeles, Portland, Seattle, and San Diego stayed steady throughout the 1930s. Only two cities in the Ninth Circuit, San Francisco and Los Angeles, were counted among the top twenty-five urban areas in the United States in 1940. At this late date in the country's development, the West contained only 14 percent of the country's population, even though it made up one-half of the nation's land mass.^[2]

The economy of the western states had developed quickly from the mid-nineteenth century to the Great Depression, but natural resources still comprised their primary source of wealth. The Ninth Circuit states lagged far behind the rest of the country in industrial might as well as population density. Consequently, when the Depression caused a drop in agricultural and ore prices worldwide, the Far West suffered most severely. The region's farmers and miners could do little to counteract the falling prices for their goods caused by the systemic effects of the Depression. The lack of a dense population severely constrained the ability of state and local governments to raise revenues for relief and work programs. The dire experience of Montana in the 1920s served as an extreme example for her sister Ninth Circuit states in the following decade. As wheat, copper, and timber prices had plummeted in the early 1920s, Montanans had learned that they lacked the population base and economic diversity to extract themselves from an economic downturn as harsh as the Great Depression was to be.^[3]

What states such as Montana were unable to do at the state level Roosevelt pledged to try at the national. Roosevelt swept into the White House with a mandate to attack the Depression with federal programs. A combination of economic necessity and political expediency brought the West a higher per capita share of New Deal beneficence than any other region of the country. Nevada garnered the most federal expenditures per capita, at $1,130, with Montana second, at $710. Each Ninth Circuit state surpassed the national average of $224. These programs, which included reclamation projects, agricultural price and support programs, the building of great dams and power plants, and numerous construction projects, resulted in federal expenditure in Ninth Circuit states between 1933 and 1939 of an estimated $7.5 billion.^[4]

Just as the New Deal programs transformed the West, so did the Roosevelt administration usher in significant developments for the Ninth Circuit. By the middle of 1935, Roosevelt had named four of the five judges who sat on the court. These judges came to the bench with a wide array of political and judicial philosophies. Some wholly favored the New Deal; others abhorred it. The court's decisions during this period reveal these differences. In some cases, judges antipathetic to the New Deal found in the judicial process ways to subvert Roosevelt's programs, even when these judges constituted a minority on the court as a whole. Fissures on the Ninth Circuit reflected nationwide disagreement among judges and lawyers about the constitutionality of key New Deal programs. Until 1937, by slender majorities the Supreme Court invalidated many crucial recovery laws. These rulings forced Ninth Circuit judges who favored the president's programs to devise creative ways of avoiding Supreme Court precedent. Analyzing these cases sheds light not only on how the Ninth Circuit's judicial process worked in the 1930s but also on how that process affected substantive developments in the West.

Moreover, the addition of two new judgeships in 1937 brought the court's strength up to seven for the first time and presented Roosevelt with an opportunity to pack the Ninth Circuit with jurists sympathetic to his programs. The two Roosevelt chose were Albert Lee Stephens of Los Angeles and William Healy of Boise, Idaho. Born in Indiana on January 25, 1874, Stephens attended public schools before graduating with the LL.B. degree in 1903 from the University of Southern California and taking up the practice of law. In 1906, Stephens began a long career in public service that included stints as justice of the peace in Los Angeles (1906–1910), member of the Civil Service Commission of Los Angeles (1911–1913), Los Angeles city attorney (1913–1919), judge of the California superior court (1920–1932), associate justice of the district court of appeals (1932–1933), and then presiding justice (1933–1935). President Roosevelt appointed Stephens as United States district judge for the southern district of California in 1935, the position from which he was elevated to the Ninth Circuit in 1937.^[5]

A lifelong Democrat, Stephens was an early backer of Woodrow Wilson. Legend has it that Stephens played a prominent, if well-concealed, role in the 1916 reelection of Wilson over Charles Evans Hughes. While Hughes was stumping in the Los Angeles area, Stephens contrived to take newsmen on a tour of Hollywood. Hughes went on to Long Beach unaware that Governor Hiram Johnson was staying there. As Chief Judge Richard Chambers told the story at a memorial for

Stephens in 1965, "Somehow the non-sympathetic newspapermen got back to Long Beach [and] the sympathetic newspapermen who might have given Mr. Hughes the good advice to go see the governor never reached there. Thus, the famous snub occurred which supposedly elected Woodrow Wilson."^[6]

The second new member to the court was William Healy of Idaho. Born September 10, 1881, in Windham, Iowa, Healy graduated in 1906 with an A.B. degree from the University of Iowa. Two years later he received the LL.B. degree from the Iowa Law School and gained admission to the Idaho bar that same year. After engaging in private practice for many years, Healy served as general counsel for the Farm Credit Administration in Spokane, Washington, from 1934 to 1937. He was prominent in state affairs, serving as a member of the legislature in 1913–1914, as a member of the state board of education and board of regents of the University of Idaho from 1917 to 1920, and as a delegate to the Idaho Constitutional Convention in 1933.^[7]

Healy and Stephens joined a group of judges who generally backed the president's programs on appellate review. For Garrecht, Denman, Haney, Stephens, and Healy, the dire economic circumstances of the country affected their analysis of Congress's power to legislate recovery through regulation of commerce and of agency efforts to administer congressional directives. Discussions of the prevailing economic conditions fill their opinions. Wilbur viewed Congress's power much more restrictively even in the midst of crisis, as apparently did Mathews, who routinely voted against the New Dealers' position but rarely wrote to explain why. For these two judges, law had a more static quality: it was to be guided by enduring principles rather than by the exigencies of the moment. These fundamental differences of opinion underlay the court's handling of most of the legal problems emanating from the Depression. Not unlike their Ninth Circuit predecessors, who debated the proper role of the court in adjudicating the diverse issues posed by natural resource development and Prohibition, the New Deal-era judges disagreed on fundamental principles of constitutional law and statutory interpretation.

In both eras, the Ninth Circuit's decisions mattered a great deal, even to people who had only the vaguest notion of the court's existence. The court's rulings on New Deal programs, like those on natural resource controversies a generation earlier, proved that for a vast array of intermediate-level disputes, the circuit court of appeals contributed greatly to regional development. True, not many of these disputes formed the

factual basis for decisions of enduring constitutional significance, and the most important of such cases would be superseded on appeal to the Supreme Court. But the Ninth Circuit decided numerous cases that had social and economic importance for the people of the region it served.^[8] Cases across the spectrum of New Deal efforts, from agriculture to emergency recovery legislation, labor relations, and public works, confirm the court's important role in the assault on the Great Depression. These cases also highlight how the court itself was changing as an institution.

II. Agricultural Woes

Highly dependent on activities, such as farming, livestock production, and lumbering, that produced renewable resources, the West suffered severely from the Great Depression. Farm land prices declined precipitously; average per capita income among the agricultural population dropped to below half the non-farm level, which itself had fallen dramatically. Foreclosures escalated. Agricultural prices generally decreased 63 percent between 1929 and 1933, whereas industrial prices dipped by 15 percent.^[9]

The New Deal represented the first federal attempt to help farmers who had been victimized by adverse economic circumstances. In his first hundred days, Roosevelt launched the Agricultural Adjustment Administration (AAA) to oversee government efforts designed to boost prices, stabilize production, and reduce crop surpluses. Over the next seven years a number of laws followed to refine these basic principles, including price support and production controls, crop insurance, disaster relief, and a host of other programs created to resettle poor farmers, improve soil conservation efforts, extend farm credit, establish rural electrification, and distribute surplus food. These legislative efforts built on the price-support and production-adjustment schemes of the original Agricultural Adjustment Act of 1933, which set out to raise farm prices and stabilize the agricultural market through government regulation. The theory of the self-correcting marketplace, most New Dealers believed, could not explain the prevailing economic forces. The plight of western and midwestern farmers required some type of government action. The act attempted to redress fundamental market problems principally by regulating the price of certain commodities, restricting production, and authorizing payment to farmers who agreed not to produce certain agricultural products.^[10]

Farmers throughout the Ninth Circuit's constituent states eagerly participated in programs administered by the AAA. The AAA carefully monitored the extent of this involvement, and the statistics it gathered highlight the importance of the New Deal agricultural reforms for western farmers. By early 1936, in a bid to shore up prices the AAA had signed 127,001 contracts with Montana farmers to regulate crop production. The numbers of contracts in other Ninth Circuit states testified to the widespread impact of the programs: in Arizona, 5,680 contracts; in California, 25,300; in Idaho, 75,259; in Nevada, 1,388; in Oregon, 31,533; and in Washington, 48,301. In the period from 1932 through 1935, the program appeared to be making strong headway in restoring cash income levels for farmers. Nationwide, agricultural income rose by 66 percent in this four-year period, from $4.377 billion to $7.201 billion. The comparative benefit to the western states was greater still: each Ninth Circuit state except Oregon and Washington far outpaced the national average in farm income growth, and these two states were just below average at 60 and 62.5 percent, respectively.^[11]

The AAA worked to control milk production. In California, the milk industry had made a modest recovery by 1935. Income from milk production had risen 11.5 percent in the previous four years, from $65.5 million to $73.0 million. Even this gain was imperiled in early 1935, when the Ninth Circuit considered a challenge to the administration of the AAA milk program in California. Judge Curtis Wilbur's opinion in Berdie v. Kurtz set the tone for the struggle among the Ninth Circuit judges over the New Deal's agricultural programs. In Berdie , the court ruled that the 1933 Agricultural Adjustment Act did not empower the secretary of agriculture to issue licenses regulating intrastate production, sale, or distribution of milk.^[12] Charles Cavanah, a district judge from Idaho who sat on the panel by designation, joined Wilbur's opinion.

Berdie reflected Wilbur's overall disapproval of government regulation and his hostility to the theory that regulations on intrastate activity were acceptable if they had interstate commercial effects. He could not strike down the legislation as an improper restraint on intrastate commerce, however, because the Supreme Court had already sustained regulation of exclusively intrastate activities that burdened interstate commerce. Nor could he invalidate the regulation under the delegation doctrine, which held that delegations of authority by Congress to executive agencies were invalid if they called for the agency to exercise "legislative" power. The explicit nature of the statutory standards blunted such a challenge. Instead, Wilbur interpreted the agency's stat-

utory authority as narrowly as possible, writing that Congress had delegated authority to the secretary only to regulate interstate commerce and that therefore this particular regulation was invalid, since it dealt solely with the Los Angeles milk industry and thus concerned intrastate commerce.^[13]

Wilbur went to some lengths to advance a more overtly free-market political agenda, a position his colleague Francis Garrecht found completely untenable under the prevailing economic circumstances. In a sharply worded dissent, Garrecht took the court's senior judge to task for downplaying the interstate effects of intrastate regulation of the milk industry. The chain of these consequences began with the decrease in income among the general population in Los Angeles that had caused a decline in milk purchases. Between 1929 and 1932, the gross income of California dairy farmers from milk sales dropped by 35.4 percent. As milk producers competed for shrinking markets, the resulting price wars steadily drove dairy farmers out of the milk business. Increasingly desperate, these milk producers shifted to butter and cheese production, a process that in turn had interstate commercial effects. Over 60 percent of the butter and 85 percent of the cheese sold in Los Angeles during the previous four years had been produced outside California. Garrecht thus saw a direct link between regulation of the local milk price and interstate commerce in butter and cheese products. Garrecht was a fervent New Dealer and the first Roosevelt appointee to the Ninth Circuit, but his position fell victim to the court's procedure of drawing a district judge to fill out a panel—in this case, a judge persuaded by Wilbur. Nor did Garrecht have the option of calling for the full court to reverse through en banc reconsideration. It would be six years before Congress authorized a procedure by which all members of the circuit courts of appeals could reconsider the decision of one of its panels. Nevertheless, Garrecht's views of Congress's power to regulate intrastate commerce eventually prevailed, not only on his court but in the Supreme Court as well.^[14]

A more supportive view among the federal judiciary for Roosevelt's agriculture program would not develop for another few years. Nine months after the Ninth Circuit's decision in Berdie , the Supreme Court issued an even more sweeping denunciation of the legality of the Agricultural Adjustment Act. On January 6, 1936, the Court held that the 1933 act exceeded the constitutional authority of Congress to regulate commerce, and it expressly invalidated a processing tax as an improper regulation of agricultural production. A week later the Court struck down the Agricultural Adjustment Act of 1935, which had extensively

modified the 1933 program. Neither decision explicitly addressed the crop-production-control provisions, but the Court's sweeping language on the limits of Congress's power to regulate commerce left the many farmers who had signed contracts in doubt as to their continued legality. The Court's rulings thus sparked widespread discontent in the West. Despite the recognized flaws in the emergency agricultural legislation, farm groups across the country supported the general scheme presented in these Agricultural Adjustment acts.^[15]

The period following the Berdie decision and the Supreme Court's invalidations of Agricultural Adjustment Act taxing provisions offered a great challenge to the New Dealers on the Ninth Circuit. Subordinate to the Supreme Court, the Ninth Circuit had to express its obeisance to precedent. The Court's AAA rulings must have disenchanted such jurists as Garrecht, who had represented many farmer groups before ascending to the bench. The New Dealers on the Ninth Circuit soon demonstrated that the complexity of the agriculture statutes, the uncertainty among the justices as to the constitutionality of other disputed provisions, and their own intellectual talents in distinguishing away unfavorable rulings combined to yield a more pro-administration jurisprudence than their senior judge would countenance. Berdie had demonstrated that despite their numerical edge, the Democratic judges were at times unable to stop the determined opposition of Judge Wilbur to the New Deal. But although the fluidity of the appellate panel process worked to the disadvantage of Garrecht in Berdie , it also weakened the doctrinal hold of Wilbur's position.^[16]

When the Ninth Circuit next considered an appeal involving the AAA, Wilbur was not on the panel, a factor that surely shaped the tenor, if not the outcome, of the decision. In a test case on constitutional aspects of provisions of the 1935 AAA amendments not at issue in the earlier Supreme Court case, a panel composed of Garrecht, Denman, and Haney heard a fruit shipper's appeal from a permanent injunction granted in favor of the United States against shipments of oranges and grapefruit grown by the shipper in California or Arizona. The case provided an ideal vehicle for deciding the constitutional questions, because the shipper, Edwards Fruit Company, stipulated to the facts and rested its sole argument on the unconstitutionality of these AAA amendments. By going beyond the issues directly presented in the case, moreover, Denman's opinion started the erosion of the rule Wilbur had crafted in Berdie .^[17]

Pursuant to the 1935 law, the secretary of agriculture had issued orders limiting the amount of citrus fruits each shipper could transmit

in interstate or foreign commerce in a given week. By establishing prices, the order sought to restore purchasing power to an equivalent of the prewar period of August, 1909, to July, 1914. The statute also directed the secretary to take into account the effect on consumers if prices escalated too rapidly. Edwards Fruit Company's challenge to the constitutional validity of this statutory authorization raised a question with significant commercial consequences. Of the 50,000 growers of oranges and grapefruits in the United States, 36 percent resided in Arizona and California. Together these citrus fruits ranked in national value behind only apples. In California, the farm value of oranges and grapefruits was three times greater than that of any other fruit crop. As the prices for these fruit products fell, so did California's total farm worth. Population growth had not kept pace with the escalating stock of oranges. From 1930 to 1937, the market supply of oranges increased ten times more rapidly than the United States population. Given that 90 percent of California's oranges, then, moved in interstate or foreign commerce, the secretary's order had far-reaching consequences in the citrus industry.^[18]

In assessing the statute under these circumstances, Denman's approach differed significantly from Wilbur's. The two clearly diverged on whether an order affecting intrastate activity could be justified as a regulation of interstate commerce. The question presented in Edwards v. United States —whether Congress could empower the secretary to set prices for goods moving in interstate commerce—was far different from that posed in Berdie —whether the secretary could issue orders regulating intrastate milk production, sales, and distribution. Edwards seemed squarely within Congress's constitutional power to regulate commerce "among the several States." In an elaborate opinion, Denman took judicial notice that such interstate price controls would influence intrastate production. He then proceeded to show that governmental actions affecting intrastate activities were valid exercises of constitutional authority under the Commerce Clause. As Denman put it in Edwards , "The orchards are the springs from which flow the streams of that commerce."^[19]

Partly to justify this seemingly unnecessary analysis and partly to apply the Supreme Court precedents that only months before had signaled what appeared to be a change in the Court's perspective, Denman determined that NLRB v. Jones and Laughlin Steel Corporation , which the Court had decided in April of 1937, overruled Carter v. Carter Coal Company . In Carter , the Court had invalidated a statute that attempted to justify intrastate coal production codes as regulations of interstate commerce. In Jones and Laughlin , the Court upheld a statute permitting

employees not engaged in interstate or foreign commerce to organize for collective bargaining purposes, on the ground that their intrastate actions affected interstate commerce. These opinions seemed irreconcilable, but the Jones and Laughlin Court itself merely said that Carter was "not controlling here," which Denman interpreted to mean that Carter was "not 'determinative' of this question, solely because it is overruled." Although legal scholars have vindicated Denman's reading, Judge Bert Haney was surely correct in his concurrence that Denman need not have gone so far. Haney did agree, however, with Denman's holding that Jones and Laughlin sanctioned congressional regulation, under the Commerce Clause, of "merchandise produced within and carried out of the state or that produced and remaining within it."^[20]

Discussing his opinion in Edwards , Denman later wrote to a friend that one "of the pleasant incidents of a life tenure is that one can put in one page of an opinion citations from Karl Marx, Sutherland, and Van Devanter, and make what at least reads like a logical argument for the constitutional validity of a congressional act." But the Edwards decision did more than string together a few seemingly incongruous references, as Denman well knew. The seed planted there sprouted a year later when the court heard a challenge by a walnut marketer to AAA regulation of the walnut industry in California, Oregon, and Washington. Judge William Healy joined a Denman opinion that upheld the AAA regulations. Using Edwards as the controlling precedent, in this 1938 case Denman extended his analysis of Congress's power to regulate commerce to include, not only the producer of a commodity, but also the intrastate actions of a marketer. His opinion held that Congress could regulate intrastate commerce if that regulation bore a reasonable relation to the prevention of the economic evil of disparate pricing in the interstate walnut trade. Denman's opinion sanctioned the viability of intrastate regulations if they had some interstate effects; it also expressed deference to fact-findings by the secretary regarding the effect of these intrastate regulations on interstate prices. Clifton Mathews, who along with Curtis Wilbur was outnumbered by the New Dealers on the court, dissented without opinion.^[21]

Before the Supreme Court's decision in Jones and Laughlin , which Denman's Edwards opinion extended to the agricultural recovery program, the Supreme Court's invalidation of the Agricultural Adjustment acts had threatened harsh consequences for some western agricultural producers. Much of the federal farm aid during the New Deal flowed westward from Washington. The fifteen million farmers in the western

half of the country received two-thirds of the agricultural benefits disbursed by the government, with the rest going to the fifteen million farmers in the East. Between 1933 and 1938, federal agricultural assistance went overwhelmingly to Ninth Circuit states. Six of the seven Ninth Circuit states ranked among the top eight recipients in total loans and expenditures per farm capita, and the other, Oregon, was thirteenth nationally. The farmers in these states benefited the most because they had lost most at the onset of the Depression: states that suffered the greatest drop in farm income between 1929 and 1932 were granted the highest levels of federal benefits.^[22]

The Ninth Circuit's handling of cases arising out of these agricultural programs offered an early warning of the need for court procedural reforms. As the court gained its sixth and seventh members in 1937, the disparity in judges' views was sufficiently great that panel composition could and did significantly affect the outcome of a case. A majority of two on a panel could theoretically bind the other five members of the court in the announcement of Ninth Circuit law. As Denman's studied avoidance of Wilbur's Berdie opinion revealed, clever judges distinguished away precedents with which they disagreed. Clearly such a system was undesirable, but no solution had as yet been devised. And even as the ideological focus on the court's schisms offers one insight into the development of the Ninth Circuit's politics, sympathy for the New Deal was not the sole driving force in the establishment of a procedure for the entire court to consider a case. As cases arising under the National Industrial Recovery Act demonstrated, even judges sympathetic to the Roosevelt administration sometimes disagreed sharply among themselves.

III. Judicial Chasms Over Recovery Legislation

Democrats generally viewed the National Industrial Recovery Act (NIRA) as the legislative centerpiece of Roosevelt's first hundred days. Like the many New Deal agricultural reform efforts, this program gave statutory expression to a popular assumption that the market system had failed. Government action, New Dealers contended, would restore proper returns for businesses and ensure reasonable wages for workers. The NIRA accordingly required the establishment of codes of fair competition and minimum wages for workers. Principally through these two mechanisms, but also through other measures, the Roosevelt administration hoped to achieve several ambitious goals: to put idle plants back into operation, to boost employment by decreasing working

hours, and to create equitable pricing. The statute attempted to balance the interests of labor, business, and consumers. The Democrats believed that industry and labor would abstain from unfair competition if they were permitted to establish mutually agreeable rules governing competition. This program received an immediate legal challenge, and commentators attacked the plan as "naive advice" to business: "Congress realizes that it has not found the key to recovery, and it abdicates in favor of business. The Act which it has adopted and which has since been put forward, with the fanfare of trumpets, synthetic war psychology, and extravagant advertising, as the National Industrial Recovery Act is a comprehensive blank."^[23]

Congress delegated to the private sector the authority to fill in this blank through the establishment of local codes of fair competition, a deputation found unconstitutional by the Supreme Court in the landmark case of A.L.A. Schechter Poultry Corporation v. United States . The Court held that, by vesting in nongovernmental entities the authority to establish self-policing codes with the force of law, Congress had violated separation of powers principles. Pacific Northwest lumber interests, who had objected to the codes from the outset, particularly applauded the decision. In Oregon, a large number of independent lumber concerns refused to cooperate with the National Recovery Administration. One Oregonian described the NIRA program as the "'worst misfortune that [had] ever befallen the United States.'"^[24]Schechter Poultry signaled, not only the Supreme Court's concern about the constitutional underpinnings of a critical Roosevelt program, but also the deep chasm in viewpoint between conservatives, who occupied many leadership positions in business and who composed a majority on the Supreme Court, and New Dealers, both in the administration and on the federal bench.

In the years after Schechter Poultry , the Ninth Circuit considered several NIRA cases, albeit none with the far-reaching significance of the appropriately nicknamed "sick chicken case." These cases highlighted the increasing importance of federal statutory analysis in the court's work. In one such case, in which the Ninth Circuit reversed a district court decision that invalidated a contract between a school district and a contractor, Judge Bert Haney's opinion exemplified the subtle power of the appellate court. The school district had received a grant from the United States to build an addition to a school, and in the contract the government had imposed as a condition that the contractor must abide by NIRA regulations. After beginning work on the school addition in January, 1934, but before its completion in February of 1935, the parties

agreed to numerous changes in plans that slowed construction. The school district alleged that because of these delays the contractor owed liquidated damages for breach of contract. The contractor in turn asserted that the district owed over $42,000 for nonpayment under the contracts. The district court ruled that the contracts were invalid because they contained an illegal delegation of power from a state governmental entity, a school district, to the United States government. If, for example, the contractor failed to abide by the NIRA codes, the contract empowered the administration to render such a determination and invalidate the contract. The court reasoned that the district had no authority to delegate such power to the national government.^[25]

Judge Bert Haney, who wrote also for Francis Garrecht, concluded that Congress could constitutionally condition the granting of money for school additions on compliance with the NIRA codes. That power derived from the legislature's power to spend money for the general welfare. By contrast to the Supreme Court's decision in Schechter Poultry , which cast the problem of delegation in a more sterile theoretical light with no apparent consideration of the country's desperate economic situation, and United States v. Butler , which appeared to reject such an expansive view of congressional spending power, in his decision Haney placed the constitutional issues in the context of the prevailing difficulties: "At the time of the enactment of the National Industrial Recovery Act, a severe economic emergency was upon us, nationwide in scope. To relieve that emergency the act was passed providing for a program which would promote employment, and thus aid in the relief of the emergency. To that end a large appropriation was made for expenditures in public works. The appropriation was valid." In a separate concurrence, Judge Clifton Mathews exposed just how far afield Haney had gone to assert Congress's power to redress the economic malaise. Mathews believed simply that the contractor had no standing to assert the unconstitutionality of the delegation by the school district under the conditions of the grant, which were the contractual terms between the United States government and the school district. Mathews's theory attracted no other adherents on his court, however, and to the extent that other circuit courts of appeals confronted similar issues, they expressed Haney's view.^[26]

The Ninth Circuit's division over the NIRA was symptomatic of the wider rifts in the federal judiciary on the act's validity. The composition of the Ninth Circuit reflected the ideological divisions on the Supreme Court, except that in numbers the Ninth Circuit favored the New Dealers. The positions taken by Curtis Wilbur, the only Republican, reliably

comported with those of the uncertain Supreme Court majority that struck down New Deal legislation until 1937.^[27] Wilbur's colleagues were all Roosevelt-appointed Democrats, albeit not all reliable New Dealers. Clifton Mathews frequently voted against the Roosevelt administration's position, but he rarely invoked the constitutional obstructions to New Deal legislation favored by Wilbur. The other five judges—Garrecht, Denman, Haney, Stephens, and Healy—supported Roosevelt's program. Occasionally the circumstances of the case drew a dissenting vote, but these five provided a solid New Deal majority on the Ninth Circuit, with Garrecht as the most ardent advocate of national power to redress the prevailing economic difficulties.

Cases arising under the excise tax provision of the NIRA elicited some of the diversity of views found even among the New Deal sympathizers on the Ninth Circuit and presented a different facet of the recovery program: the need to raise money to pay for the New Deal. Section 213 of the NIRA imposed a 5 percent excise tax on company dividends declared after enactment of the NIRA on June 16, 1933. In a series of cases, the Ninth Circuit held that dividends declared before the enactment of the NIRA were nevertheless subject to the excise tax. In the first of the series, the court liberally construed the excise tax provision to cover a declaration of dividends made before the NIRA's effective date. Garrecht's opinion, which Haney joined, reasoned that because the declaration of dividends could still be voided by the company, it was not final. Stephens, who had upheld California recovery legislation when he was a state judge, believed that Garrecht had gone too far. He dissented because the "dividends upon which tax is claimed were absolutely and unqualifiedly declared prior to the date of the enactment of the statute." In other circuits that examined this issue, the views of both Garrecht and Stephens resonated, the Seventh siding with the former and the Fifth lining up with the latter.^[28]

Garrecht's opinion expressed a preference for furthering the national government's interests in financing the recovery effort over the complaints of the region's businesses, which had to pay the resultant taxes. A generation earlier, the court had sided with companies when sued by the federal government in disputes over natural resources; Garrecht's position, then, perhaps signaled a changed attitude among Ninth Circuit judges regarding assertions of government power. In a similar case handed down in 1939, a completely different panel of the court (Denman, Mathews, and Healy) sustained Garrecht's position. The district court had ruled that the commissioner of internal revenue improperly disal-

lowed a claimed refund because the company's "dividend declared" created a binding debtor-creditor relationship between the company and the stockholder. Citing Garrecht's opinion in the earlier case as authority, the Ninth Circuit reversed. Writing also for Denman over a dissent without opinion by Mathews, Healy found that the company had qualified its payment by declaring that dividends would be paid "whenever in [the judgment of the secretary and treasurer] there are moneys available to pay the same." In a subsequent case, Healy and Denman extended this rule still further. Although the corporation had not only made a firm declaration but had actually paid a dividend, the court nonetheless upheld the application of the excise tax. The company had paid the dividend, in the full amount declared, two weeks after the NIRA's enactment on June 16, 1933. Healy and Denman deemed this fact immaterial because the company still had discretionary authority to revoke the dividend before the act's effective date. In a pattern that was by now becoming familiar, Mathews once again dissented without opinion.^[29]

The NIRA excise tax cases demonstrated the willingness of a majority of Ninth Circuit judges seemingly to go beyond the plain meaning of the statute in order to sanction the Roosevelt administration's attempts to collect these revenues. Having these revenue collection measures upheld greatly assisted the administration in its attempts to revive the economy through federal programs. Between 1934 and 1941, nearly 17 percent of the Ninth Circuit's docket consisted of tax matters. Except in the NIRA excise cases, however, the court tended to balance the government's interest in revenue collection with the taxpayer's interest in avoiding payment.^[30] Although they were surely an important facet of the court's day-to-day work, these tax cases arguably had much less impact in shaping regional developments than did the labor cases that arose under the National Labor Relations Act.

IV. Labor Controversies

The labor controversies of the 1910s and 1920s in the West involved efforts by miners and industrial workers to organize in order to gain basic collective rights. The most acute labor disputes centered in the large coastal communities of San Francisco, Los Angeles, Seattle, and San Diego. The steadily rising unemployment rate threatened to renew labor unrest in these urban centers. By 1932, 31 percent of the unionized workforce in Los Angeles were unemployed; in San Francisco, 24 percent were out of work. For organized building trades, the figures were even

higher: 52 percent in Los Angeles and 62 percent in San Francisco. Statewide, 28 percent—700,000 workers—were jobless. Even those who were employed suffered, as average wages fell by more than 50 percent between August of 1930 and June of 1932. Grievances varied from worker to worker, but solidarity was sufficiently strong that San Francisco was paralyzed when a walkout by longshore workers in 1934 spread into a general strike, an event notable for its widespread rioting and violence. By the 1930s, grave difficulties between labor and management had spread inland, as farm laborers and growers struggled to protect themselves during the economic downturn. During this decade, 140 agricultural labor strikes involving 127,000 workers occurred in California. In 34 of those strikes, at least 1,000 workers walked out. In Oregon a total of seventeen strikes involved 8,000 laborers.^[31]

Although workers had long been granted the right to join labor unions, the power of employers severely limited their exercise of this right. The New Deal, especially section 7(a) of the National Industrial Recovery Act, gave new impetus to organized labor. That provision codified workers' rights to organize and to bargain collectively through their own chosen representatives. Although the NIRA sanctioned a new vehicle for the expression of workers' rights, companies were reluctant to implement section 7(a). A number of strikes broke out because employers would not recognize and bargain with unions. Many companies refused to negotiate with any labor representative who did not work at their plant and obstructed efforts to resolve claims that were supported by more than one union group. As J. Warren Madden, the first chairman of the National Labor Relations Board, later wrote with decided understatement, "It was all very frustrating."^[32]

Congress responded to the ineffectiveness of NIRA's section 7(a) by enacting the National Labor Relations Act (NLRA) in 1935. The NLRA codified the right of employees to organize unions, to bargain as a group, and to engage in collective action. It defined "unfair labor practices" to include interference with these rights, use of company unions to discourage effective organization, discrimination against employees because of their union activities, and discharge or other discrimination against employees for exercising their rights or filing grievances against their employers. The act also established the National Labor Relations Board (NLRB) and empowered it to order employers to cease and desist from unfair labor practices. Congress vested jurisdiction over appeals from these orders in the circuit courts of appeals, with subsequent review by the Supreme Court on writ of certiorari.^[33]

Nine days after the first members of the NLRB took their posts, a pro bono lawyers' group attacked the constitutionality of the NLRA. The board responded by arranging test cases to establish the act's validity in a variety of economic contexts. The initial cases brought by the board immediately raised the specter that the federal courts would strike down the act as unconstitutional. At least one circuit court of appeals was apparently "unwilling to be the first to face the constitutional questions" posed by the NLRA; that court was not, however, the Ninth Circuit.^[34] From the perspective of the roosevelt administration, the Ninth Circuit panel formed to assess the NLRA's constitutionality could not have been worse: it consisted of Wilbur, Mathews, and Garrecht. Wilbur had already expressed his deep-rooted opposition to the New Deal through both constitutional and statutory arguments. Mathews had not written on a pivotal case, but his dissents without opinion spoke loudly enough to give the administration little comfort. Garrecht's was the only vote on this panel likely to uphold the NLRA's constitutionality.

That Wilbur and Mathews appeared repeatedly on the panel in these important cases challenging the constitutionality of New Deal programs may or may not have been coincidental. Under the Ninth Circuit's internal rules, Wilbur as senior judge had the authority "after conference with the Circuit Judges [to] designate and assign the judges who are to hear the causes placed upon the calendars of the court; such designation or assignment may be modified or set aside by a majority of the judges."^[35] Until the Supreme Court began to adopt a more permissive view of the constitutionality of New Deal legislation in 1937, Wilbur and Mathews seemed to staff panels in important cases with a regularity that belied randomness. Wilbur's papers shed no light on his decision-making process in this regard, nor do they reveal any dissatisfaction on the part of his fellow judges concerning how cases were assigned. This issue, however, was not one that could be raised easily without a serious breach of judicial etiquette. As the court's disposition of the NLRA test case intimated, Wilbur's colleague Francis Garrecht must have chafed under his senior judge's exercise of this power.

The case, NLRB v. Mackay Radio and Telegraph Company , was noteworthy for more than the frustration it may have caused Garrecht. More important, it represented an intellectual crossroads on the Ninth Circuit regarding the acceptance of economic substantive due-process doctrines. Over the previous three decades, the Supreme Court had developed a position that generally limited the power of Congress and the states to enact laws regulating working conditions. The most famous

progenitor of this doctrine, the Court's 1905 decision in Lochner v. New York , struck down New York's maximum-hours law for bakers as a violation of freedom of contract and due process. Throughout the Lochner era, the justices disagreed sharply among themselves over the extent to which statutes regulating business violated substantive due process. Even as late as 1936, a majority of five struck down such laws. Within a year, Justice Owen Roberts seemingly shifted his position to join a new majority of five in upholding a Washington provision that established a minimum wage for women and children workers.^[36] The Supreme Court's own uncertainty provided ambiguous guidance for the lower federal courts. The Ninth Circuit's handling of Mackay Radio illustrated the disparate views percolating in the lower federal courts, the ability of a single judge to impose his positions on the court, and the need for a process to enable the full court to review panel decisions.

The case arose when employees at a San Francisco telegraph office joined a nationwide strike. The company replaced the strikers with nonstriking employees from other offices. After some of the San Francisco strikers decided to abandon the walkout, management agreed to accept the returnees but refused to unseat any replacements who wished to remain in San Francisco. The company also required eleven strikers to submit new applications for employment and ultimately denied reinstatement to five of them, all of whom had been prominent in the union activities. The rejected employees notified the NLRB, which investigated, brought charges, made findings, and issued a cease-and-desist order. The board then petitioned the Ninth Circuit to enforce the order.^[37] The court announced its decision on January 11, 1937, through Judge Wilbur, whose lengthy opinion held the NLRA to be unconstitutional. Mathews concurred separately, and Garrecht dissented. Attempting to breathe new vigor into Lochner ism, Wilbur wrote that this exercise of Congress's commerce power unconstitutionally abridged the right of companies to make contracts freely under the Fifth Amendment due process clause. With a reverential bow to Lochner and numerous citations to turn-of-the-century cases of the same ilk, Wilbur argued that the right of companies to make contracts unqualifiedly trumped Congress's authority to regulate interstate commerce.^[38] Wilbur believed that the Lochner era's prohibitions on minimum wage and hours legislation applied equally well to collective bargaining contracts:

It is argued on behalf of the petitioner that, as the right to bargain collectively is a well-recognized right, Congress can protect that right. That is true, but in so doing Congress is at the threshold of private and personal rights with

which its power to interfere is limited by the Constitution. In that field the right of the individual is superior to the power of Congress, save in exceptional cases. The right of Congress begins only where these inherent and inalienable rights of the individual end. The right to bargain collectively in its essence is the right of a group of persons to select its own agents—an inherent right. When the form of legislation prohibits an individual worker from bargaining for the terms of his own employment, or from selecting his own agent for that purpose, the act destroys instead of protects the right upon which collective bargaining is recognized and sustained; that is, the right to contract by and through any chosen agent, or without any agent at all.^[39]

The implications of this reading of substantive due process were clear: "[B]y reason of the Fifth Amendment to the Constitution Congress has no power to compel employers and employees engaged in interstate commerce to negotiate their contracts of employment in a specific way and to prohibit the negotiation in any other way."^[40]

Expressing a view he would later repeat, Mathews contended that the specific facts, and not the Constitution, compelled the result Wilbur wanted. He believed it unnecessary to decide the constitutional question, because the board had not provided sufficient evidence to sustain its order. From the NLRB's perspective, this type of reasoning was potentially more destructive to its purposes than was Wilbur's. Once the Supreme Court established the constitutionality of the NLRA, Wilbur would have no choice but to apply precedent. By focusing on the facts and expressing a strong willingness to reverse the board's fact-findings, Mathews more subtly achieved the result both judges apparently sought, without raising issues of obvious merit in a petition for certiorari to the Supreme Court. When the Court reversed the senior judge's opinion in Mackay Radio , Wilbur moved closer to Mathews's view.^[41]

Garrecht dissented with an eloquence that very likely sprang from a law clerk he employed from 1934 to 1948, Gilbert Cosulich. Cosulich had a penchant for flowery language. In addition to holding a law degree, he was a journalist. He began his legal career as a law clerk to Judge William Sawtelle, whose opinions also show signs of Cosulich's touch. After Sawtelle died, Garrecht hired Cosulich as a clerk, and after Garrecht's death in 1948 Cosulich moved to Hawaii, where he served under Territorial Judge Frank McLaughlin. In 1958 he attempted to make his way back to the Ninth Circuit. At the time, Judge Albert Lee Stephens was strongly considering hiring him, but Judge James A. Fee allegedly told Stephens, "No associate of mine is going to have a ghostwriter," and Stephens reconsidered. Whether Cosulich drafted these opinions without any editing, as he boasted in his 1958 applications for a job as a law clerk,

or whether he simply assisted Judge Garrecht and others to improve their prose, his gifts as a writer surely helped the judges for whom he worked to fill the Federal Reporter with powerful images.^[42]

Almost certainly with Cosulich's assistance in Mackay Radio , Garrecht closely tied the prevailing economic circumstances to his interpretation of the appropriate law: "The increase and magnitude of the conflicts between employers and workers are appalling. In many instances much loss and suffering are precipitated upon those in no sense responsible for these difficulties and at times the general welfare of the country becomes involved in the struggle." Garrecht curtly rejected Mathews's objection to the order. The statute provided that the board's fact-findings should be "conclusive"; in his view, the evidence that the company had discharged the five workers for their labor union activities was "convincing." As for Wilbur's opinion, the senior judge had taken Supreme Court doctrine much further than a fair reading of those cases warranted: "[E]ven the authorities relied upon in the main opinion do not go to any such extreme." Garrecht had little patience with Wilbur's attempts to revive economic substantive due process. He argued that the Lochner -era cases cited by Wilbur were in themselves limited to a qualified due-process right in relation to the Commerce Clause and that the Supreme Court had silently overruled or modified many of them. He ended with a sharp jab: "The main opinion argues for absolute liability to contract, but the irony of the situation is that under existing economic conditions such freedom as between master and worker is mostly mythical. The only liberty interfered with is the liberty of the strong to oppress the weak."^[43]

The Mackay Radio decision, the first major case regarding the NLRB to be decided by the Ninth Circuit, exposed deep divisions on the court. The Supreme Court decisively upheld the NLRA's constitutionality, but Wilbur remained undaunted. When the Ninth Circuit reconsidered its decision in Mackay Radio through a petition for rehearing brought later that year, the panel lined up exactly as before, only this time Wilbur wrote that a statutory defect prohibited the board from enforcing its order. Wilbur drew a distinction between "reinstatement" as provided in the NLRA and "reemployment," a term used for new of former employees: Congress could order the former, but not the latter. This distinction failed to persuade either Mathews, who again concurred in the result on the ground that the board had lacked evidence to sustain its order, or Garrecht, who again dissented. As Garrecht candidly said of Wilbur's opinion, "This view appears to me to be a strained construction designed to nullify the National Labor Relations Act in an important field of its

operations."^[44] In light of other circuit court of appeals rulings and the Supreme Court's reversal of Wilbur's opinion the following year, Garrecht's assessment seemed accurate. Long after the Ninth Circuit's role in Mackay Radio was forgotten, the vitality of the Supreme Court's treatment continued.^[45]

Once the Supreme Court firmly and finally decided the constitutionality of the NLRA and the statutory authority of the NLRB, cases steadily flowed into the board and up to the circuit courts of appeal. The Ninth Circuit itself rendered decisions that involved some of the largest corporations in the West, including Oregon Worsted Company, a textile manufacturer; American Potash and Chemical Corporation, one of the largest borax and potash distributor-producers in the world; Union Pacific Stages, a regional transportation company; M and M Wood Working Company, a lumber company with operations in Oregon and Washington; the Hearst Corporation, the newspaper and media giant; and Pacific Greyhound Lines.^[46] In these cases the court began the long process of filling in the administrative and procedural details authorized under the NLRA.

Except for Wilbur and Mathews, the members of the court agreed that the board had power to enforce orders against recalcitrant companies who acted in violation of the NLRA. General agreement did not, however, mean uniformity of view. For two years after Mackay Radio , a flood of separate opinions accompanied nearly every ruling, as each judge struggled to understand and articulate principles to guide future adjudication. Although marked by disagreement, these decisions nevertheless fleshed out the legal process by which labor and management could resolve many of their disagreements in a more orderly, less violent manner than they had in the past. Neither union leaders nor corporate officials viewed the NLRB as a panacea, but the board did help to impose a legal imprimatur on labor-management relations. Between 1937 and 1942, when the board was young, the Ninth Circuit granted more than 80 percent of the NLRB's petitions for enforcement and thereby significantly aided the process of transferring worker grievances from the picket lines to government hearing rooms. The number of strikes decreased, and the western labor movement entered a more overtly political phase, in which rival unions vied for worker support.^[47]

V. Dams and Water

Recovery legislation brought immediate aid to westerners, emergency agricultural relief propped up suffering farmers, and national labor laws

defused tension between workers and management. The benefits accrued from these laws, though very real, paled somewhat in comparison to the longterm significance of programs launched by the Department of the Interior. The New Deal's greatest impact in the Ninth Circuit states arguably stemmed from the Roosevelt administration's water development policy. In the 1934 budget for the Public Works Administration, for example, Congress allocated more than $103 million, a sum that equaled half the total amount spent on Bureau of Reclamation projects from 1902 to 1933. Whereas before 1933 the annual federal expenditure for reclamation had averaged nearly $9 million, from 1933 to 1940 it exceeded $52 million. These projects used scarce water for a variety of purposes, including consumption as drinking water, erosion and flood control, generation of electricity, irrigation, wildlife conservation and forest development, and recreation. Although the impetus for water control had begun three decades earlier with the enactment of the Newlands Reclamation Act on June 17, 1902, before the New Deal era the federal government launched only a few major projects in the West.^[48]

The great water projects of this period—Boulder Dam, Grand Coulee Dam, and the Central Valley project—changed the West and touched the lives of people in most of the Ninth Circuit states. Electricity was but one such benefit. During World War II, reclamation projects accounted for 84 percent of the growth in total electricity production in the eleven states of the Far West. By December, 1944, with more than thirty of its power plants in the West on line, the Bureau of Reclamation claimed to be "'the largest single producer of power in the world.'" Boulder (later renamed Hoover) Dam provided electricity for Los Angeles and other cities in Arizona and Nevada, irrigation water for the Imperial Irrigation District, which covered 500,000 acres, and silt protection for irrigators in southern California, Arizona, and Mexico. By 1940, Bureau of Reclamation projects provided irrigation for approximately six million acres of arid land and directly supported over one million people.^[49]

These projects transformed the Far West. Without the efforts of untold numbers of federal officials and private construction workers and the institutional backing of the national government and large corporations they would not have been possible. The great complexity of these undertakings invariably led to legal disputes that required the western federal courts' attention. The Supreme Court's ability to review only a small number of cases left the Ninth Circuit effectively as the court of last resort in controversies both large and small. At each stage in a project, the court adjudicated disputes on a range of issues, balancing the public interest in project completion against the concerns of parties

adversely affected by development plans. The first legal questions raised by these federal projects addressed the adequacy of compensation for lands "taken" by the federal government. Such enormous projects as the Grand Coulee Dam in Washington and Shasta Dam in California required the expropriation of thousands of acres. The government designated the largest tracts at the dams' backwaters, which were flooded to create reservoirs. The Grand Coulee Dam, for example, involved the taking of an estimated 18,000 acres of privately owned land that was divided into 600 tracts with 900 different owners. In addition to these privately owned plots, the backwater lands included parts of the Colville Indian Reservation and the Spokane Indian Reservation. These large takings sparked major litigation by a disgruntled land company attempting to extract a higher level of compensation. The company asserted that it should get compensation in the value of the land as a dam site, with water for irrigation and generation of electricity, since private capital could have developed the project. The Ninth Circuit rejected this creative theory. The point of the government's venture was to put relatively valueless land to a more economically productive use. To assess the government a higher cost of compensating because of the theoretical possibility that private enterprise could build a dam and a hydroelectric plant might have threatened other public reclamation projects.^[50]

The Ninth Circuit generally upheld the government's position in these condemnation proceedings, but in an important case involving the Central Valley project the Ninth Circuit sided with the landowner. The first task in every takings case of this type was to determine the appropriate date for assessing market value. For the Central Valley project, this normally pedestrian issue became more challenging, because the government did not decide precisely which land to appropriate until after Congress had formally adopted the program by statute. Landowners knew that some but not all of the lands in the area surrounding the proposed site of Shasta Dam would be condemned. Land speculation set off a rise in values, and the Ninth Circuit had to determine whether to credit that increase. The district court ruled that the fair market value of the land had to be assessed as of August 26, 1937, because on that date Congress enacted the Central Valley project legislation. The court reasoned that the taking became publicly known at that time.

The Ninth Circuit reversed. In an opinion by Judge Albert Lee Stephens, the court permitted admission of evidence on the increased value between August of 1937 and December 14, 1938, because no one publicly knew the precise location of the affected land until the latter date.

The value of some land that the government did not expropriate naturally rose. Stephens found no unfairness in the speculation that increased value in the vicinity between August, 1937, and December, 1938, because not all landowners would benefit by being able to sell their land to the government through the taking. Judge Francis Garrecht concurred in part and dissented in part. He believed that permitting the inflated value worked an unfairness "'to the public which is to pay for it.'"^[51] The disagreement of the two Roosevelt appointees concerned who was to assume the burden of reimbursing the landowners at the higher rate. Stephens's prevailing position assessed that cost on the taxpayer at large, whereas Garrecht would have deprived the landowner of the rise in value.

Once the court decided takings issues of the Central Valley type, the next array of litigation issues typically arose from project construction. The dams were hazardous to build. During the construction of Boulder Dam, for example, at least fifty workers lost their lives and countless others were injured. The federal courts' jurisdiction over matters of state law between citizens of different states brought one unusual Boulder Dam personal injury suit before the Ninth Circuit. A man was injured when he appeared on site to apply for a construction job. Caught in the rain, he requested and received permission to enter the premises to get dry. An explosion occurred near the boiler where he had strung his wet clothes. He sued for damages but received nothing. The Ninth Circuit upheld the district court's order sustaining demurrers to the complaint because the injured worker had not pleaded a theory under which the law permitted recovery. In addition to construction-related lawsuits involving personal injuries, the court also rendered decisions at the construction phase of project development regarding contracts and performance bonds.^[52]

Once the land had been taken and the dams and electricity plants built, legal controversies then arose over the distribution of water rights. The completion of Boulder Dam enabled water from the Colorado River to be used for irrigation in the Imperial and Coachella valleys. Until the completion of the All-American Canal, commercial and agricultural enterprises in these valleys received water at high rates from a canal that crossed from Mexico. In a major suit against the Imperial and Palo Verde irrigation districts, the Coachella Valley County Water District, the Metropolitan Water District of Southern California, the City of Los Angeles, and the City and County of San Diego, an individual sought an injunction to stop the water districts and communities from contracting to apportion the water that California was to receive under the Colorado River compact. Had the court sided with the complainant, the entire

water distribution agreement would have been threatened. Sensitive to the implications of this lawsuit, the Ninth Circuit refused to upset the delicate compromise that made the allocation agreement possible. "The instant issue is not one alone affecting an individual citizen or his separate property," District Judge Jeremiah Neterer (sitting by designation) wrote. "The water of the river is a treasure that offers necessity of life to at least several millions of people, and must be apportioned in harmony with the provisions of law, in equality of right and equity for the common good." In this same spirit, the court determined in another case that the United States was an indispensable party and that a suit between a reservoir district and the Idaho watermaster to adjudicate water rights for the American Falls Reservoir project could not be maintained without the participation of the secretary of the interior.^[53]

Perhaps the most contentious lawsuit over rights to water in these years involved the City of San Francisco and its water supply. The 1906 fire had first exposed the gross inadequacy of the city's water sources; the problem grew as more people moved to the Bay Area. During the next seven years a struggle ensued between the competing interests of a water-starved growing city and a conservation movement led by the famed John Muir, who believed that the Hetch Hetchy Valley slated for submersion was every bit as spectacular as the Yosemite Valley nearby. In this instance the conservationists lost. In 1913 Congress passed the Raker Act, under which the United States ceded to San Francisco rights to use lands and waters in Yosemite National Park. The statute authorized construction of a dam in the Hetch Hetchy Valley to impound surplus water for generation of electricity and consumer use in San Francisco. Section 6 of the law provided that "the grantee is prohibited from ever selling or letting to any corporation or individual, except a municipality or a municipal water district or irrigation district, the right to sell or sublet the water or the electric energy sold or given to it or him by the said grantee." The Raker Act thus required public ownership of the untility operations, but the city left the distribution of power and water to the Pacific Gas and Electric Company (PG&E).^[54]

During the 1930s, the man most responsible for water development projects in the West, Harold Ickes, attempted to enforce the 1913 statute. On August 24, 1935, he issued an opinion which declared that PG&E and the City of San Francisco were in violation of section 6 of the Raker Act. The city responded by informing Ickes that it would continue to dispose of its electricity under its contract with PG&E until a court ordered it to cease and desist. The interior secretary promptly sought a district court order finding that the city had contravened the Raker Act

and enjoining any further violation. The court considered whether a contract of July 1, 1925 between the city and PG&E complied with the act. The contract attempted to establish an agency agreement whereby the city would turn over its power to the utility company at a substation thirty-five miles outside San Francisco. In a detailed examination of the history of the project, the Raker Act's language, and Congress's legislative intent, District Judge Michael J. Roche of San Francisco issued an injunction against the city on the ground that the agency agreement failed to comply with the strict terms of the act. He cited seemingly unequivocal statements by the law's author, John E. Raker of California, suggesting that the legislation was intended to require San Francisco to supply its own people with electricity and water before selling any excess to a private corporation. As Judge Roche summarized his findings, "The language of the section makes it clear that no private corporation was to enjoy any profits from the government grant, which was to be enjoyed in its entirety by the consumers." He further concluded that the so-called "agency agreement" was actually a contract for resale, in which the alleged principal, the City of San Francisco, divested itself of control when it received payment for electricity from PG&E. Accordingly, he issued an injunction against the city, but, recognizing the harsh economic consequences of a sudden disruption of operations, he made its effective date six months after the decision was handed down.^[55]

A decision of such regional importance was sure to be challenged. The city appealed to the Ninth Circuit, and Wilbur, Mathews, and Denman heard the case. (After submission, for reasons that the record does not clarify, Denman disqualified himself.) For a Roosevelt administration that had by now grown accustomed to losing when Wilbur and Mathews were on the panel together, the Ninth Circuit's reversal must have come as no surprise. The court held that contracts drawn up between the city and PG&E evidenced an "agency" relationship rather than an unlawful sale of power and water by the city. Wilbur's opinion interpreted the 1925 contract between the city and PG&E on its face to create an agency relationship. He saw no disingenuity in the parties' agreement that the city would employ the company as the "temporary" distributor for the city of electrical power in an arrangement that was continued fourteen years after the contract had been signed.^[56] Wilbur wrote not a word about the legislative history, an omission for which Justice Hugo Black's opinion for the Supreme Court implicitly took him to task:

To limit the prohibitions of § 6 of the Act narrowly to sales of power for resale without more, as the City asks, would permit evasion and frustration of the purpose of the lawmakers. Congress clearly intended to require—as a con-

dition of its grant—sale and distribution of Hetch-Hetchy power exclusively by San Francisco and municipal agencies directly to consumers in the belief that consumers would thus be afforded power at cheap rates in competition with private power companies, particularly Pacific Gas & Electric Company. It is not the office of the courts to pass upon the justification for that belief or the efficacy of the measures chosen for putting it into effect. Selection of the emphatically expressed purpose embodied in this Act was the appropriate business of the legislative body.^[57]

The Supreme Court reversed the Ninth Circuit decision and upheld the district court injunction. Ickes thus won the legal battle, but the victory proved fleeting. Despite the Court's ruling that San Francisco was violating the 1913 law, the city to this day does not publicly own and manage its water and electricity distribution system.^[58]

The denouement of the Hetch Hetchy saga constituted a rare setback for Ickes's New Deal effort to ensure public ownership of electric and water resources generated through government programs. At the Ninth Circuit level, the case again suggested the need for an internal procedure to review panel decisions. Whether the New Dealers on the court would have voted the other way in the Hetch Hetchy litigation is impossible to say, but the composition of the panel formed to hear the case was as unsympathetic to the New Deal as one could get on the Ninth Circuit. Wilbur and Mathews had consistently voted against the government's position in a variety of New Deal contexts. For these two judges to be the sole decision makers for the court (after Denman's recusal) when the New Deal Democrats easily outnumbered them must have been a source of frustration for Garrecht, Haney, Healy, and Stephens. At an entirely different level, the Hetch Hetchy litigation and the many other water-project cases decided by the Ninth Circuit demonstrated the important role of the court in deciding issues with direct effects on the cost, timeliness, and efficiency of these vast endeavors. If Hetch Hetchy serves as an example of the limits of judicial power to enforce court decisions, the other water project cases establish the court's significance in the development process.

At crucial junctures during the 1930s, the Ninth Circuit decided cases that had widespread regional effects. Sometimes these cases involved statutory interpretations that reached far beyond the immediate concerns of the litigants. At other times, the court's adjudication of program administration issues directly touched the lives of westerners. Even though it was riven by internal disagreements over the legality and constitutionality of

key New Deal laws and was hampered by its own internal operating procedures, the Ninth Circuit played a substantial part in the government's response to the economic crisis. With a few noteworthy exceptions, the court's decisions upheld agricultural programs upon which thousands of western farmers relied, supported the federal government's efforts to collect taxes from recalcitrant businesses, upheld efforts by the National Labor Relations Board to stop anti-labor actions by companies, and balanced competing interests in the struggle to put scarce water resources to productive use. The personalities and judicial philosophies of the judges contribute to an understanding of the court's decisions in this era, just as the procedural rules of the court help to explain the seeming anomaly of one judge, Curtis Wilbur, being able periodically to thwart the wishes of the Democrats on the court. As the New Deal era came to a close in the late 1930s and the country braced itself for war, the internal operations of the court became the subject of an unprecedented public debate between two of the court's jurists over whether the Ninth Circuit should be divided.