Illinois Packing Co. v. Bowles, 185.

• Citation: 147 F.2d 554
• Decision Date: 13 February 1945
• Docket Number: No. 185.,185.
• Parties: ILLINOIS PACKING CO. v. BOWLES, Price Administrator.
• Court: U.S. Temporary Emergency Court of Appeals

147 F.2d 554 (1945)

ILLINOIS PACKING CO. v. BOWLES, Price Administrator.

No. 185.

United States Emergency Court of Appeals.

Submitted December 23, 1944.

Decided February 13, 1945.

Irwin N. Walker and Peter B. Atwood, both of Chicago, Ill., for complainant.

Richard H. Field, Gen. Counsel, Nathaniel L. Nathanson, Associate Gen. Counsel, Jacob D. Hyman, Chief, Court Review Price Branch, and Carl H. Fulda, Attorney, and Irene Kolin Lichtman, Atty., all of the Office of Price Administration, all of Washington, D. C., for respondent.

Before MARIS, Chief Judge, and MAGRUDER, LINDLEY, and LAWS, Judges.

MAGRUDER, Judge.

In this complaint, Illinois Packing Company claims to be aggrieved by an order of the Price Administrator dismissing its protest challenging the validity of certain provisions of Amendment No. 2, 9 F.R. 1820, to Regulation No. 3, 8 F. 10826, of the Defense Supplies Corporation, a wholly owned subsidiary of the Reconstruction Finance Corporation, 6 F.R. 2972. A special subsidy of 80 cents per cwt. to non-processing slaughterers of cattle was established pursuant to a directive of the Office of Economic Stabilization issued October 25, 1943, 8 F.R. 14641. The provisions of Amendment No. 2 to which complainant takes exception prescribe various conditions upon the payment of the subsidy in question. To be eligible for the subsidy, a non-processing slaughterer, as defined, must be an "unaffiliated slaughterer"; that is, it must not "own or control" or be "owned or controlled by" a processor of meat, and the phrase "own or control" is defined as meaning "to own or control directly or indirectly a partnership equity or in excess of ten per cent of any class of outstanding stock. * * *" It is alleged that the Defense Supplies Corporation held that complainant was not eligible to receive the special subsidy upon the ground that more than ten per cent of its outstanding capital stock was owned or controlled by a processor of meat, to wit, Pfaelzer Brothers of Chicago, Illinois.

To test the validity of these provisions of Amendment No. 2, Illinois Packing Company brought a declaratory judgment suit against the Defense Supplies Corporation in the United States District Court for the Northern District of Illinois, on the theory that that court had jurisdiction to determine the validity of the amendment under § 2(m) of the Emergency Price Control Act, as amended by the Stabilization Extension Act of 1944, 58 Stat. 632, 50 U.S.C.A.Appendix, § 902(m). The District Court dismissed the complaint, holding that Amendment No. 2 had been issued under § 2 of the Emergency Price Control Act and that under § 204(d) of that Act, 50 U.S.C.A.Appendix § 924(d), the Emergency Court of Appeals had exclusive jurisdiction to pass upon its validity. Illinois Packing Co. v. Defense Supplies Corp., D.C., 1944, 57 F.Supp. 8.

Thereafter, on October 12, 1944, the Illinois Packing Company, purporting to act pursuant to the provisions of § 203(a) of the Emergency Price Control Act, 50 U. S.C.A.Appendix, § 923(a), filed with the Office of Price Administration a protest against the provisions of Amendment No. 2 in question. The prayer of the protest was "that the Office of Price Administration enter an order in this protest specifically holding that said Amendment No. 2 to Regulation No. 3 of Defense Supplies Corporation is invalid and contrary to the Subsidy Order issued by Fred M. Vinson as Director of the Office of Economic Stabilization on October 25, 1943, * * *."

The Price Administrator on November 9, 1944, issued an order dismissing the protest. In an accompanying opinion, the Administrator stated:

"Section 2(e) also authorizes the Administrator to buy or sell commodities or to make subsidy payments to domestic producers of such commodities upon such terms and conditions as he determines to be necessary to obtain the maximum necessary production. It is expressly provided, however, that with regard to commodities defined as strategic or critical pursuant to Section 5d of the Reconstruction Finance Corporation Act subsidy payments may be made only by corporations created under that Section. Since meat has been defined as a strategic and critical material, the Administrator has no authority to make subsidy payments to slaughterers of meat or to determine the conditions of such payments. Therefore even if a subsidy regulation issued by the Administrator under Section 2(e) should be protestable, it is clear that the protest and judicial review provisions of the Emergency Price Control Act, as amended, are not applicable in this case. The present protest is directed exclusively against a regulation issued by Defense Supplies Corporation. The prayer for relief asks the Price Administrator to hold invalid a regulation issued by another government agency. Obviously even if the Administrator should wish to grant the protest he would have no power to do so since nothing in the Emergency Price Control Act authorizes him to modify or set aside any regulation issued by other government agencies. It seems clear, therefore, that the present protest must be dismissed for lack of jurisdiction."

Following the dismissal of its protest, Illinois Packing Company filed the present complaint in this court, asserting that we have jurisdiction under § 204(a) and (c) of the Emergency Price Control Act, 56 Stat. 23.

The Price Administrator, as respondent, has filed a motion to dismiss the complaint for the reason that this court lacks jurisdiction to entertain it.

Our jurisdiction under § 204(a) is limited to entertaining a complaint by any person "who is aggrieved by the denial or partial denial of his protest". The "protest" referred to carries back to § 203(a), which provides that, "after the issuance of any regulation or order under section 2", any person subject thereto may, in accordance with regulations to be prescribed by the Administrator, file a protest specifically setting forth his objections to the regulation or order. The subsection then goes on to describe the action which the Price Administrator is to take in disposing of the protest. Thus it is clear that our jurisdiction under § 204(a) to set aside regulations or orders is limited to regulations or orders issued under § 2 of the Act, and then only after a protest duly filed under § 203 (a) has been denied in whole or in part. Safeway Stores, Inc. v. Brown, Em.App., 1943, 138 F.2d 278, certiorari denied 1943, 320 U.S. 797, 64 S.Ct. 266.

Curiously enough, the complainant joins with respondent in asserting our lack of jurisdiction to entertain the present complaint, though for different reasons. Complainant asks us to place our denial of jurisdiction upon the ground that Amendment No. 2 is not a regulation or order issued under § 2 of the Act but, on the contrary, is issued pursuant to the general authority vested in the President by §§ 1 and 2 of the Act of October 2, 1942, 56 Stat. 765, 50 U.S.C.A.Appendix, §§ 961, 962, now cited as the Stabilization Act of 1942, and by the President delegated to the Office of Economic Stabilization by Executive Order 9250, Oct. 3, 1942, 50 U.S.C.A.Appendix § 901 note, 7 F.R. 7871. What the complainant hopes to gain from such a ruling, apparently, is to clear the path for its pending appeal in the case of Illinois Packing Co. v. Defense Supplies Corporation, D.C., 1944, 57 F.Supp. 8, referred to above; that is, if we lack jurisdiction to pass upon the validity of provisions of Amendment No. 2 prescribing conditions upon the payment of subsidies, the District Court was in error in dismissing the complaint in that case on the ground that the subject matter was within the exclusive jurisdiction of the Emergency Court of Appeals.

The Act of October 2, 1942, contains no express provision authorizing the President to establish a subsidy program, and we have been referred to nothing in the legislative history indicating that Congress intended in the general language of that Act, to confer any subsidy powers. Such grant of power was indeed unnecessary, for § 2(e) of the Emergency Price Control Act, to which the Act of October 2, 1942, was complementary, had already conferred authority to make subsidy payments, in the following terms:

"Whenever the Administrator determines that the maximum necessary production of any commodity is not being obtained or may not be obtained during the ensuing year, he may, or behalf of the United States, without regard to the provisions of law requiring competitive bidding, buy or sell at public or private sale, or store or use, such commodity in such quantities and in such manner and upon such terms and conditions as he determines to be necessary to obtain the maximum necessary production thereof or otherwise to supply the demand therefor, or make subsidy payments to domestic producers of such commodity in such amounts and in such manner and upon such terms and conditions as he determines to be necessary to obtain the maximum necessary production thereof: Provided, That in the case of any commodity which has heretofore or may hereafter be defined as a strategic or critical material by the President pursuant to section 5d of the Reconstruction Finance Corporation Act, as amended, such determinations shall be made by the Federal Loan Administrator, with the approval of the President, and, notwithstanding any other provision of this Act or of any existing law, such commodity may be bought or sold, or stored or used, and such subsidy payments to domestic producers thereof may be paid, only by corporations created or organized pursuant to such section 5d; * * *."

Complainant seeks to draw a distinction between the objective of the Act of October 2, 1942, which, it asserts, is "the stabilization of prices and wages", and the purpose of the subsidy power conferred by § 2(e) of the Emergency Price Control Act, which is "to obtain the maximum necessary production." But there is no such antithesis. The stabilization of prices,...