Schaefer v. Fleming, 367.
| Citation | 160 F.2d 552 |
| Decision Date | 27 March 1947 |
| Docket Number | No. 367.,367. |
| Parties | SCHAEFER et al. v. FLEMING, Temporary Controls Adm'r. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
Abraham Gottfried, of Los Angeles, Cal., for complainant.
Samuel M. Singer, Attorney, of Washington, D. C. (Carl A. Auerbach, General Counsel, William R. Ming, Jr., Chief, Court Review Price Branch, James A. Durham, and Josephine H. Klein, Attorneys, all of Washington, D. C., all of the Office of Price Administration, on the brief), for respondent.
Before MARIS, Chief Judge, and McALLISTER and LINDLEY, Judges.
Heard at Los Angeles, Cal., December 30, 1946.
Some time back in 1943, complainants became engaged in the enterprise of procuring the manufacture of bamboo rakes in Mexico, for sale in the United States. During that year, they carried on considerable informal negotiations with the Office of Price Administration, proposing and seeking the establishment of maximum selling prices for such rakes; but no price was fixed as a result of their activities, because certain detailed statements required by the Price Administrator had not yet been submitted.
Complainants came within the category of importers of goods from foreign countries for sale within the United States. Since they had not established a maximum price under the General Maximum Price Regulation, they were required, by Section 8(e) of the Maximum Import Price Regulation* to apply to the Export-Import Price Branch of the Office of Price Administration for approval of proposed maximum selling prices. The Maximum Import Price Regulation adopted as a basis for the establishment of maximum prices, the "landed costs," which existed at a certain base date, and added thereto certain margins also determined with reference to a base date. But the foregoing is not pertinent to this case. However, new items which had not previously been imported, — and this is the provision with which we are here concerned — were to be priced at levels in line with those priced under the general formula. The Regulation sought to provide a basis, fair and equitable to importers as a group; new items were to be given prices within this general framework; and importers had to conform to the price levels thus established. This, it may be observed, is similar to the theory, under which many other maximum price regulations have been promulgated by the Administrator.
Accordingly, on May 5, 1944, complainants filed a formal application in compliance with the Maximum Import Price Regulation requesting the establishment of a maximum price on bamboo rakes imported from Mexico. In their application, they sought a price of $1.29 per rake, with discounts from 33 1/3% to 50%. They also sent a sample rake on to Washington for examination by the Export-Import Price Branch.
On July 3, 1944, complainants received a letter from Charles J. Walsh, Price Executive of the Export-Import Branch of the Office of Price Administration, at Washington, advising them that they could sell such bamboo rakes to wholesalers at a maximum price of 40 cents each, f.o.b. Los Angeles, and to retailers, at a maximum price of 50 cents each, f.o.b. Los Angeles. They were advised that these prices were in line with the prices approved for other importers of bamboo rakes.
Shortly after receiving this letter, complainants, on July 7, 1944, wrote Walsh, the price executive, protesting that such prices were too low, and stating that it appeared that he had either failed to consider the costs as outlined in their letter of application, or that the information from other sources, on which the decision was based, was erroneous. They also mentioned that because of action by the United States Custom Department, complainants had been required to increase their entry prices, subsequent to the time of their application, and that, further, they had ascertained that 40% of the rakes received in shipments were defective, instead of 10%, as they had estimated when they first made application for maximum prices. Nearly a month passed with no answer to this letter, and complainants then wired on August 1, 1944, to Walsh requesting a reply.
On August 4, 1944, Walsh wired complainants that the maximum prices for complainants' rakes had been revised, and that they had been increased from 40 and 50 cents each for sales to wholesalers and retailers, respectively, to 44 and 55 cents. A letter from Walsh of the same date informed complainants that, "in the light of the additional information contained" in complainants' letter of July 7, 1944, the price established on July 3, 1944, had been reviewed and reconsidered, and that the Export-Import Branch
On August 7, 1944, complainants again protested against the revised maximum prices as being too low, and pointed out that the rakes which they were importing were "definitely superior and an improved version of bamboo rakes."
On August 11, 1944, Walsh wired stating that "if rake you are now importing is superior to sample submitted, please send another sample."
On September 5, 1944, complainants advised the Export-Import Branch that a sample had been sent the same date by express, and called to the attention of Walsh that they had been informed that a wholesale price of 64 cents had been granted to Pacific Bamboo Products, of Los Angeles, for a Mexican bamboo rake of inferior quality.
Complainants subsequently asked for a decision on several occasions, finally dispatching a telegram on June 25, 1945, asking a ruling, or advice on when a ruling on their request for further reconsideration might be expected.
On July 4, 1945, eleven months after the Export-Import Branch had requested a second sample rake, which was supplied by complainants, they received a telegram from Walsh, on behalf of the Branch, stating that he regretted that he could not recommend increasing prices over 44 cents each to wholesalers, and 55 cents each to retailers, f.o.b. Los Angeles, on the basis of the information submitted.
On July 31, 1945, complainants filed a protest under Section 203(a) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A. Appendix, § 923(a), claiming that the maximum prices established for the rake which they imported, were not determined in accordance with law, but that they were established arbitrarily and capriciously.
Immediately after complainants filed their protest, and on the same day, the Price Administrator filed a suit against complainants for treble damages on the ground that they had violated the order establishing maximum prices.
Complainants' protest was considered by a Board of Review which recommended denial of the protest on the ground that the maximum prices fixed by the Export-Import Branch were properly determined, and that the protested order was not arbitrary, capricious, or otherwise invalid. The Administrator adopted the recommendations of the Board of Review, and entered an order denying the protest; and the present complaint was thereafter filed in this court.
Many contentions are advanced involving various aspects of the case, but upon a review of the record, we have come to the conclusion that the decisive issue is whether the Administrator's determination — that the maximum prices which had been fixed for complainants' rake were in line with those of other importers — was supported by substantial evidence. We concur in the statement made in the brief of counsel for the Administrator, in which they say that "the only substantive question before the court is whether there was sufficient evidence for the Administrator's factual conclusion that complainants' revised prices were in line with those of other importers." For if there is not substantial evidence to support such conclusion, the order establishing such maximum prices is arbitrary and capricious, and must be set aside.
The evidence in the case consists of numerous affidavits submitted by both parties to the controversy. It also appears that several types of bamboo rakes were in evidence and referred to in the affidavits.
The Administrator introduced in evidence only one affidavit and, upon it, placed his sole reliance to sustain his conclusion. This was the affidavit of Theodore Ashmore, Associate Economist and Business Analyst of the Export-Import Branch of the Office of Price Administration, from the time complainants made their first application for maximum prices up to the date of the filing of their protest.
In this affidavit, Ashmore sets forth that, from 1937 to 1943, he had been in the general import business, and during that time, had imported bamboo, bamboo rakes, rugs, mats, and fibres "from Japan, India, Dutch East Indies, etc.," and that he was familiar with the importing and merchandising of bamboo rakes and with the relative price lines in which such articles were sold at wholesale and retail, prior to price control. He stated that before the war, the only country exporting bamboo rakes in any significant quantity, was Japan. Apparently, he had never imported anything from Mexico.
Ashmore then recounted how complainants had applied for the establishment of maximum prices on bamboo rakes imported from Mexico, and that after they had submitted one of the rakes as a sample, he had recommended a maximum price of 40 cents each to wholesalers, and 50 cents each to retailers, and that these maximum prices were established by order dated July 3, 1944; that...
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