328 U.S. 395 (1946), 793, Porter v. Warner Holding Co.

• Citation: 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332
• Party Name: Porter v. Warner Holding Co.
• Case Date: June 03, 1946
• Court: U.S. Supreme Court

Page 395

328 U.S. 395 (1946)

66 S.Ct. 1086, 90 L.Ed. 1332

Porter

v.

Warner Holding Co.

No. 793

United States Supreme Court

June 3, 1946

Argued May 2, 3, 1946

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

1. In an enforcement proceeding under § 205(a) of the Emergency Price Control Act of 1942, a Federal District Court has power to order restitution of rents collected by a landlord in excess of maximums established by regulations issued under the Act. Pp. 398-399.

2. Under the provision of § 205(a) authorizing the District Court, upon a proper showing, to grant "a permanent or temporary injunction, restraining order, or other order," an order for the recovery and restitution of illegal rents may be considered a proper "other order" either (1) as an equitable adjunct to an injunction decree, or (2) as an order appropriate and necessary to enforce compliance with the Act. Pp. 399-400.

3. The legislative background of § 205(a) supports the conclusion that the traditional equity powers of a court remain unimpaired in a proceeding under that section so that an order of restitution may be made. P. 400.

4. The provision of § 205(e) authorizing an aggrieved tenant, and in certain circumstances the Price Administrator, to sue for damages does not conflict, except as to an award of damages, with the jurisdiction of equity courts under § 205(a) to issue whatever "other order" may be necessary to vindicate the public interest, to compel compliance with the Act, and to prevent and undo inflationary tendencies. Pp. 401-402.

5. In considering a restitution order where there are conflicting claims between tenants and landlord as to the amounts due, the District Court has inherent power to bring in all interested parties and settle the controversies or to retain the case until the matters are otherwise litigated. P. 403.

151 F.2d 529 reversed.

The Price Administrator brought suit under § 205(a) of the Emergency Price Control Act of 1942 to enjoin respondent from violating the Act and to require respondent

Page 396

to make restitution of rents collected in excess of maximums established by regulations issued under the Act. The District Court enjoined respondent from violating the Act, but denied a restitution order. 60 F.Supp. 513. The Circuit Court of Appeals affirmed. 151 F.2d 529. This Court granted certiorari. 327 U.S. 773. Reversed, p. 403.

MURPHY, J., lead opinion

MR. JUSTICE MURPHY delivered the opinion of the Court.

In this case, we are concerned with the power of a federal court, in an enforcement proceeding under § 205(a) of the Emergency Price Control Act of 1942,¹ to order restitution of rents collected by a landlord in excess of the permissible maximums.

The Warner Holding Company, the respondent, owns eight apartment houses in Minneapolis, Minnesota, containing approximately 280 dwelling units. Between November 1, 1942, and June 29, 1943, it demanded and received rents in excess of those permitted by the applicable maximum rent regulations issued under the Act. The Administrator of the Office of Price Administration then brought this action in the District Court to restrain the respondent from continuing to exceed the rent ceilings. The complaint was later amended to seek, in addition, a decree requiring the respondent

to tender to such persons as are entitled thereto a refund of all amounts collected

Page 397

by defendant from tenants as rent for the use and occupancy of housing accommodations in excess of the maximum rents established by said Regulation, provided, however, that defendant shall not be required to make such tender to any person who has commenced an action against defendant under Section 205(e) of the Emergency Price Control Act of 1942 alleging the collection by defendant of rent in excess of the maximum rents established by said Regulation.

The District Court enjoined respondent from continuing to collect rents in excess of the legal maximums, but declined to order restitution. Bowles v. Warner Holding Co., 60 F.Supp. 513. The Eighth Circuit Court of Appeals affirmed the judgment. 151 F.2d 529. Both courts held that there was no jurisdiction under the statute to order restitution. We granted certiorari because the result was in conflict with that reached by the Sixth Circuit Court of Appeals in Bowles v. Skaggs, 151 F.2d 817, and because of the obvious importance of the issue in the administration and enforcement of the Emergency Price Control Act.

This proceeding was instituted by the Administrator under § 205(a) of the Act, which provides:

Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.

Thus, the Administrator invoked the jurisdiction of the District Court to enjoin acts and practices made illegal

Page 398

by the Act and to enforce compliance with the Act. Such a jurisdiction is an equitable one. Unless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction. And since the public interest is involved in a proceeding of this nature, those equitable powers assume an even broader and more flexible character than when only a private controversy is at stake. Virginian Ry. Co. v. System Federation, 300 U.S. 515, 552. Power is thereby resident in the District Court, in exercising this jurisdiction, "to do equity and to mould each decree to the necessities of the particular case." Hecht Co. v. Bowles, 321 U.S. 321, 329. It may act so as to adjust and reconcile competing claims and so as to accord full justice to all the real parties in interest; if necessary, persons not originally connected with the litigation may be brought before the court so that their rights in the subject matter may be determined and enforced. In addition, the court may go beyond the matters immediately underlying its equitable jurisdiction and decide whatever other issues and give whatever other relief may be necessary under the circumstances. Only in that way can equity do complete, rather than truncated, justice. Camp v. Boyd, 229 U.S. 530, 551-552.

Moreover, the comprehensiveness of this equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command. Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied. "The great principles of equity, securing complete justice, should not be yielded to light inferences, or doubtful construction." Brown v. Swann, 10 Pet. 497, 503. See also Hecht Co. v. Bowles, supra, 330.

It is readily apparent from the foregoing that a decree compelling one to disgorge profits, rents or property acquired

Page 399

in violation of the Emergency Price Control Act may properly be entered by a District Court once its equity jurisdiction has been invoked under § 205(a). Indeed, the language of § 205(a) admits of no other conclusion. It expressly envisages applications by the Administrator for orders enjoining violations of the Act and for orders enforcing compliance with the Act, and it expressly authorizes the District Court, upon a proper showing, to grant "a permanent or temporary injunction, restraining order, or other order." As recognized in Hecht Co. v. Bowles, supra, 328, the term "other order" contemplates a remedy other than that of an injunction or restraining order, a remedy entered in the exercise of the District Court's equitable discretion. An order for the recovery and restitution of illegal rents may be considered a proper "other order" on either of two theories:

(1) It may be considered as an equitable adjunct to an injunction decree. Nothing is more clearly a part of the subject matter of a suit for an injunction than the recovery of that which has been illegally acquired and which has given rise to the necessity for injunctive relief. To be sure, such a recovery could not be obtained through an independent suit in equity if an adequate legal remedy were available.² [66 S.Ct. 1090] White v. Sparkill Realty Corp., 280 U.S. 500; Lacassagne v. Chapuis, 144 U.S. 119. But where, as here, the equitable jurisdiction of the court has properly been invoked for injunctive purposes, the court has the power to decide all relevant matters in dispute and to award complete relief even though the decree includes that which might be conferred by a court of law. Alexander v. Hillman, 296 U.S. 222, 241-242.

Page 400

(2) It may be considered as an order appropriate and necessary to enforce compliance with the Act. Section 205(a) anticipates orders of that character, although it makes no attempt to catalogue the infinite forms and variations which such orders might take. The problem of formulating these orders has been left to the judicial process of adapting appropriate equitable remedies to specific situations. Cf. Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 194. In framing such remedies under § 205(a), courts must act primarily to effectuate the policy of the Emergency Price Control Act and to protect the public interest while giving necessary respect to the private interests involved. The inherent equitable jurisdiction which is thus called into play clearly authorizes a court, in its discretion, to decree restitution of excessive charges in order to give effect to the policy of...