Walter Brown & Sons v. Clark

• Decision Date: 25 February 1948
• Docket Number: No. 361,362.,361
• Citation: 166 F.2d 435
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals
• Parties: WALTER BROWN & SONS, Inc. v. CLARK.

166 F.2d 435 (1948)

WALTER BROWN & SONS, Inc. v. CLARK.

Nos. 361, 362.

United States Emergency Court of Appeals.

Heard September 2, 1947.

Decided February 25, 1948.

Arthur J. Hilland, of Washington, D. C. (Hanserd K. Presley, of Washington, D. C., on the brief), for complainant.

Irving J. Helman, General Counsel, Liquidation Division, Department of Commerce, of Washington, D. C., (Tom C. Clark, Atty. Gen., and Floyd L. Cook, Charles G. Mulligan and Harry H. Schneider, Attys., Department of Justice, all of Washington, D. C., on the brief), for respondent.

Before MARIS, Chief Judge, and MAGRUDER and McALLISTER, Judges.

Heard at Washington September 2, 1947.

MAGRUDER, Judge.

These two complaints, which were consolidated for hearing, involve the validity, as of certain past periods, of provisions of Revised Maximum Price Regulation No. 169 — Beef and Veal Carcasses and Wholesale Cuts (7 F.R. 10381), and Revised Maximum Price Regulation No. 239 — Lamb and Mutton Carcasses and Cuts at Wholesale and Retail (7 F.R. 10688).

At the times here relevant, complainant was engaged in business in the District of Columbia as a non-processing slaughterer and wholesale dealer in lamb, veal, and edible by-products resulting from its own slaughter.

On June 28, 1943, two indictments were returned against complainant in the District Court of the United States for the District of Columbia. One indictment, in numerous counts, charged sales of foresaddles and hindsaddles of veal, during the period April 20-27, 1943, at prices in excess of those established by RMPR 169. The other indictment, in numerous counts, charged sales of hindsaddles of veal during the period January 7-February 12, 1943, at prices in excess of those established by RMPR 169, and sales of Kosher foresaddles of lamb and hindsaddles of lamb during the period December 24, 1942-February 12, 1943, at prices in excess of those established by RMPR 239. On May 29, 1946, complainant entered pleas of guilty to these indictments, and the District Court entered judgments imposing fines upon complainant. Thereafter, pursuant to § 204(e) of the Emergency Price Control Act, as amended, 50 U.S.C.A. Appendix § 924(e), complainant applied to the District Court, in each of the criminal cases, for leave to file a complaint in the Emergency Court of Appeals attacking the validity of the applicable provisions of RMPR 169 and RMPR 239. By order on June 26, 1946, the District Court granted such leave.

Respondent has urged that the complaints should be dismissed on the ground that the issues sought to be raised are res judicata as a result of our judgment of dismissal of an earlier complaint (No. 206) challenging the validity of these same regulations. Number 206 was ancillary to a civil complaint by the Price Administrator, filed in the District Court of the United States for the District of Columbia on November 18, 1943, seeking an injunction against Walter Brown & Sons, Inc., based on violations of RMPR 169 and RMPR 239 alleged to have occurred during the period September-October, 1943. In that proceeding the District Court, on January 19, 1945, entered its final decree enjoining Walter Brown & Sons, Inc., from further violations. On the same day, Walter Brown & Sons, Inc., filed an application in the District Court under § 204(e) of the Price Control Act for leave to file a complaint in the Emergency Court of Appeals attacking the validity of the two regulations. Such leave was granted on February 1, 1945, and complaint No. 206 was thereafter duly filed in this court. During all this time the two criminal proceedings against complainant, above mentioned, were pending in the District Court.

Complainant moved in No. 206 for leave to introduce evidence. We granted this motion. Complainant obtained one extension of time, but did not come forward with the evidence within the extended time, nor seek another extension. On November 20, 1945, respondent moved to dismiss the complaint for failure to proceed. Complainant having failed to file an answer or objection to the motion to dismiss within the time permitted by our rules, this court, on November 29, 1945, entered judgment dismissing the complaint.

It is claimed by respondent that the issues raised in No. 206 were in substance the same as those presented in the pending complaints. This is certainly so as to the objections to the effect that the regulations on their face were void ab initio. The violations involved in No. 206 were for a later period of time than those involved in the instant litigation. As to this, respondent argues that the earlier 1943 period was necessarily subsumed in an adjudication of the validity of the regulations as of September-October, 1943, for complainant's basic attack in both proceedings went to the validity of the regulations ab initio, and if there were no curative changes by September, 1943, there were obviously none by the earlier periods; further, that the validity of the regulations, so far as the economic effect upon the industry was concerned, could not be tested on the basis of a short period of time but had to be examined in the light of the normal yearly period of livestock slaughtering operations with its seasonal variations and fluctuations.

But did our judgment of dismissal in No. 206 for failure to proceed operate as an adjudication upon the merits? Under § 204(c) of the Price Control Act, this court is empowered to "prescribe rules governing its procedure in such manner as to expedite the determination of cases of which it has jurisdiction under this Act." We have no rule expressly covering the matter. But our Rule 9(a), 50 U.S.C.A.Appendix, following section 924, provides: "Except as otherwise provided by law or by these rules the practice shall conform to that followed in a United States district court of three judges convened in the District of Columbia under the Act of October 22, 1913, c. 32, 38 Stat. 220 (28 U.S.C. 47 28 U.S.C.A. § 47)." Since a district court sitting with three judges under the special provision of 28 U.S.C.A. § 47 is still a district court of the United States, the Federal Rules of Civil Procedure are applicable to it, and thus are incorporated by reference in, and have become a part of, our Rule 9. Rule 41(b), F.R.C.P., 28 U.S.C.A. following section 723c, provides: "For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him. After the plaintiff has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction or for improper venue, operates as an adjudication upon the merits."

We are inclined to the view that respondent's point as to res judicata is well taken. However, since we recognize a margin of doubt about it, we prefer not to rest our decision solely upon this ground but to pass upon the merits of complainant's objections to the regulations.

Complainant makes a basic objection that the regulations are invalid within the meaning of the penal provisions of the Emergency Price Control Act, §§ 4(a) and 205(b), because each regulation recites on its face that it was issued "under the authority vested in the Price Administrator by the Emergency Price Control Act of 1942, as amended, and Executive Order No. 9250 50 U.S.C.A.Appendix, § 901 note". Section 2(a) of the Act authorized the Price Administrator by regulation or order to establish such maximum prices as in his judgment will be generally fair and equitable and will effectuate the purposes of the Act. Section 4(a) provides that it shall be unlawful to sell any commodity "in violation of any regulation or order under section 2". Section 205(b) provides that any person who willfully violates any provision of § 4 shall, upon conviction thereof, be subject to fine or imprisonment. To state the argument in complainant's words: "A regulation based in whole or in part on an executive order is not a valid regulation within the meaning of sections 4(a) and 205(b) of the act. It may be valid for other purposes but has no validity under those sections."

Of course, a price regulation may be perfectly valid, whether the authority to issue it is derived from one source or two; and it may be that the argument is one not properly addressed to us as falling within our exclusive jurisdiction to pass upon the validity of price regulations, but rather, is one that should be considered by the enforcement court as involving a question of interpretation of the penal provisions of the Price Control Act. But, passing that, it is pertinent to repeat what we said of another argument in Superior Packing Co. v. Clark, Em.App.1947, 164 F.2d 343, 348, "RMPR 169 has been before this court in many previous cases, in which competent counsel challenged the regulation on a variety of grounds, not, however, advancing this particular argument. * * * That, of course, does not disprove the soundness of the new argument; but it does suggest to us that the argument should be examined with a robust skepticism."

The argument is plainly without merit. Executive Order 9250 was issued under authority of the Act of October 2, 1942, now cited as the Stabilization Act of 1942, 56 Stat. 765, 50 U.S.C.A.Appendix, § 961 et seq., which authorized the President to issue general orders stabilizing prices, wages, and salaries affecting the cost of living, and gave him broad power to delegate his authority under the Act to such department, agency or officer as he might direct. By Title I of Executive Order 9250, the President delegated such general...