LP Steuart & Bro. v. Bowles

• Decision Date: 18 February 1944
• Docket Number: No. 8677.,8677.
• Citation: 78 US App. DC 350,140 F.2d 703
• Parties: L. P. STEUART & BRO., Inc., v. BOWLES, Price Adm'r, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

78 US App. DC 350, 140 F.2d 703 (1944)

L. P. STEUART & BRO., Inc., v. BOWLES, Price Adm'r, et al.

No. 8677.

United States Court of Appeals District of Columbia

Argued February 4, 1944.

Decided February 18, 1944.

Writ of Certiorari Granted April 3, 1944.

Mr. Renah F. Camalier, of Washington, D. C., for appellant. Mr. Francis C. Brooke, of Washington, D. C., also entered an appearance for appellant.

Mr. Fleming James, Jr.,^* Director, Litigation Division, Office of Price Administration, of Washington, D. C., with whom Messrs. Thomas I. Emerson,^* Deputy Administrator for Enforcement, David London,^* Chief, Appellate Branch, Harry L. Shniderman,^* Attorney, John L. Laskey, District Enforcement Attorney, and Carl W. Berueffy,^* Enforcement Attorney, of Boulder, Colo., all of the Office of Price Administration, all of Washington, D. C., were on the brief, for appellees.

Before MILLER, EDGERTON, and ARNOLD, Associate Justices.

Writ of Certiorari Granted April 3, 1944. See 64 S.Ct. 849.

EDGERTON, Associate Justice.

This appeal is from the District Court's denial of an injunction to restrain the Office of Price Administration from enforcing a suspension order against appellant.

Appellant is, among other things, a large retail dealer in fuel oil. The Hearing Administrator of the Office of Price Administration found after a full hearing that appellant in violation of rationing regulations accepted great quantities of fuel oil from a supplier without surrendering valid rationing evidence, transferred great quantities to customers without receiving valid rationing evidence, and failed to keep required records. The suspension order forbids appellant to transfer fuel oil to customers or to receive delivery of fuel oil for resale, between January 15 and December 31, 1944; but with a proviso that if appellant furnishes a verified list of its customers during the pre-rationing year (October 21, 1941, to October 21, 1942), and surrenders all void or expired rationing evidence in its possession, it may transfer oil to any consumer whom it served during that year and may receive deliveries for that purpose. The order provides that it may be modified if modification becomes necessary in order to meet the needs of the area. It also provides for an accounting by appellant of its fuel-oil transactions.

Appellant does not deny that the evidence supported the findings of the Hearing Administrator. The complaint and answer raise no issues of fact. The District Court rendered summary judgment dismissing the complaint, but continued a temporary restraining order pending this appeal.

Appellant contends that there is no statutory authority for the suspension order. We think the District Court was right in finding such authority in the Second War Powers Act, 1942, which provides in § 2(a) (2): "Whenever the President is satisfied that the fulfillment of requirements for the defense of the United States will result in a shortage in the supply of any material or of any facilities for defense or for private account or for export, the President may allocate such material or facilities in such manner, upon such conditions and to such extent as he shall deem necessary or appropriate in the public interest and to promote the national defense."¹ The suspension order is within the President's authority to "allocate."² As the District Court observed, the power to allocate includes the power to re-allocate, or to put an end to an allocation. All allocation has positive and negative aspects. What is allocated to some is allocated away from others. An order is equally an allocation whether it prescribes what A shall receive or, as in the case of this suspension order, what B shall not receive. The language quoted from the Second War Powers Act is substantially the same as that in a previous act³ under which a number of suspension orders were issued. The practice of issuing such orders was brought to the attention of Congress when the Second War Powers Act was under consideration.⁴

Appellant urges that the suspension order is penal. If this were true it would not be conclusive, since Congress may confer upon administrative officers authority to impose penalties.⁵ But appellant contends that Congress has not in fact conferred penal authority upon the Office of Price Administration. For the purpose of the argument only, we accept this contention. It does not aid appellant, for the suspension order is remedial and not penal.

A penalty is a punishment, an injury inflicted for punitive purposes. Appellant's suspension is undoubtedly an injury, but is not imposed for punitive purposes. It is a direct means to a fairer distribution of the limited supply of oil in accordance with the allocation program. Appellant had shown a strong inclination to disregard that program.⁶ It had not merely violated the program but had informed the Hearing Administrator, in effect, that it "conceived its first duty to be the supplying of its customers with oil and that conformity with the requirements of the rationing system was subordinate thereto."⁷ This comes to saying that appellant deliberately determined, as a matter of general policy, to meet what it considered the needs of its customers whether or not they had rationing evidence. Since violation of the law was willful, statutory penalties of fine and imprisonment might have been invoked. But instead of seeking to punish, the government sought to prevent. The suspension order is intended to limit, and does limit, appellant's temptation and opportunity to violate the rationing program. The order therefore tends, in a most direct way, to promote the program. No doubt it tends also to promote the program in an indirect way by indicating that violation may not pay. But an incidental minatory effect does not turn a remedial order into a penal one. The fact that the suspension order protects the public directly, by allocating oil away from a dealer who is disposed to violate the rationing program and toward other dealers, sharply distinguishes it from fines and penalties.

Hawker v. New York⁸ illustrates the same general principle. That case involved a New York statute which...