Securities & Exchange Commission v. Chenery Corporation et al. (332 U.S. 194)
U.S. Supreme Court · decided June 23, 1947 · Supreme Court Database (Spaeth)
- Citation
- 332 U.S. 194 · 67 S. Ct. 1575
- Docket
- No. 81
- Argued
- December 13, 1946
- Decided
- June 23, 1947
- Term
- October Term 1946
- Vote
- 5–2
- Majority author
- Justice Murphy
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
How the Justices voted
- Majority
- Justice Reed, Justice Black, Justice Rutledge, Justice Murphy (wrote)
- Concurring in the judgment
- Justice Burton
- Dissenting
- Justice R. H. Jackson (wrote), Justice Frankfurter
Opinion excerpt
Mr. Justice Murphy delivered the opinion of the Court. This case is here for the second time. In S. E. C. v. Chenery Corp., 318 U. S. 80, we held that an order of the Securities and Exchange Commission could not be sustained on the grounds upon which that agency acted. We therefore directed that the case be remanded to the Commission for such further proceedings as might be appropriate. On remand, the Commission reexamined the problem, recast its rationale and reached the same result. The issue now is whether the Commission’s action is proper in light of the principles established in our prior decision. When the case was first here, we emphasized a simple but fundamental rule of administrative law. That rule is to the effect that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency. If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis. To do so would propel the court into the domain which Congress has set aside exclusively for the administrative agency. We also emphasized in our prior decision an important corollary of the foregoing rule. If the administrative action is to be tested by the basis upon…
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