American Fruit Growers v. United States, 9057.

• Decision Date: 22 September 1939
• Docket Number: No. 9057.,9057.
• Citation: 105 F.2d 722
• Parties: AMERICAN FRUIT GROWERS, Inc., v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

105 F.2d 722 (1939)

AMERICAN FRUIT GROWERS, Inc., v. UNITED STATES.

No. 9057.

Circuit Court of Appeals, Ninth Circuit.

July 24, 1939.

Rehearing Denied September 22, 1939.

W. H. Wadsworth and John H. Mathews, both of Los Angeles, Cal., for appellant.

Ben Harrison, U. S. Atty., and Irl D. Brett, Asst. U. S. Atty., both of Los Angeles, Cal. (A. D. Hadley, Atty. U. S. Dept. of Agriculture, of San Francisco, Cal., of counsel), for the United States.

Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.

HANEY, Circuit Judge.

Appeal has been taken from a decree granting an injunction pendente lite against appellant in a suit brought by appellee to restrain violation of an order made by the Secretary of Agriculture under the Agricultural Adjustment Act, as amended, 7 U.S.C.A. § 601 et seq.

Section 2 of the Agricultural Adjustment Act (Act of May 12, 1933, 48 Stat. 32, 7 U.S.C.A. § 602) declares it to be the policy of Congress, among other things, to maintain such orderly marketing conditions for agricultural commodities in interstate commerce as will establish commodity prices at a level which will give them a purchasing power equivalent to such power in the "base" period, which was fixed as between 1909 and 1914, but changed to a later period by the Secretary of Agriculture, pursuant to 7 U.S.C.A. § 608e.

The Secretary of Agriculture is authorized to issue orders applicable to handlers of agricultural commodities, including oranges. 7 U.S.C.A. § 608c(1) and (2). He is required to "give due notice of and an opportunity for a hearing upon a proposed order". 7 U.S.C.A. § 608c(3). Several options as to the content of the order are specified in 7 U.S.C.A. § 608c(6) (A) to (E), of which the Secretary of Agriculture chose (C), which requires an order to contain a provision — "Allotting, or providing methods for allotting, the amount of any such commodity * * * which each handler may market in or transport to any or all markets in the current of interstate or foreign commerce * * * under a uniform rule based upon the amounts which each such handler has available for current shipment * * * to the end that the total quantity of such commodity * * during any specified period or periods shall be equitably apportioned among all of the handlers thereof." The Secretary of Agriculture is also authorized to select an agency to administer, and to make rules and regulations to effectuate the terms, of such order. 7 U.S.C.A. § 608c(7) (C).

Violators of the order are, on conviction, subject to a fine of from $50 to $500 for each violation, and each day during which a violation continues is deemed to be a separate violation. 7 U.S.C.A. § 608c (14). That provision is directly applicable to the order in question. Section 608a(6) is relied on as authority for the injunction, which provision is: "The several district courts of the United States are hereby vested with jurisdiction specifically to enforce, and to prevent and restrain any person from violating any order, regulation, or agreement, heretofore or hereafter made or issued pursuant to this chapter, in any proceeding now pending or hereafter brought in said courts."

Subdivision (8) of the same section provides: "The remedies provided for in this section shall be in addition to, and not exclusive of, any of the remedies or penalties provided for elsewhere in this chapter or now or hereafter existing at law or in equity."

On September 24, 1935, the Secretary of Agriculture gave notice of a hearing to be held on October 9, 1935, regarding a proposed order regulating the handling of oranges and grapefruit grown in California and Arizona. At the hearing, the question as to whether the estimated quantity at the beginning of the season should be the basis for weekly prorate orders, or whether the estimated quantity at the beginning of the weekly period should be the basis for weekly prorate orders was considered. The order in question, known as Order No. 2, was issued January 4, 1936, effective January 13, 1936.

Order No. 2 contained certain findings, among them being finding 16 wherein it was found that a more stabilized market and less fluctuations in prices to growers would be brought about by "regulation of the quantity of said oranges and grapefruit from week to week, as prescribed by this order" and in finding 17, it was found that "curtailment of the season total shipments of said commodities can be effected by regulating the weekly quantities of said commodities shipped during the season".

Subdivision 1 of Section 1 of Art. II of the order provided that it was to be administered by an agency, known as the California-Arizona Orange Grapefruit Agency, which consisted of the Growers Advisory Committee and the Distribution Committee. Section 1 of Art. III provides in part: "The Distribution Committee shall find and determine for each week the quantity of weekly shipments of each variety of fruit deemed by it advisable to be shipped and to be prorated in view of the prospective effective demand in the market areas. In making such determination, the committee shall give due consideration to the following factors: * * * (2) fruit on hand in the market areas as evidenced by supplies enroute and on track at the principal markets, (3) available supply of fruit in the producing area * * *"

Subdivision 1 of section 2 of Art. III of the order provides that to obtain allotments and a prorate base, every shipper shall submit written applications therefor to the Growers Advisory Committee. Subdivision 3 of § 2 of Art. III of the order provides in part: "Every shipper applying for allotments and a prorate base shall, from time to time, and as required by the Growers Advisory Committee, submit to said committee estimates of the fruit by varieties which he controls during the current shipping season * * * The estimates shall be based on fruit eligible for sale during the current shipping season * * *"

Subdivision 4, § 2, Art. III of the order provides that the Growers Advisory Committee shall check the accuracy of applications and estimates and correct errors. Subdivision 5, § 2, Art. III of the order, provides: "The prorate base for each shipper, and for each grower who applies for allotments and a prorate base, shall be the ratio which the quantity of each such shipper's or grower's variety of fruit, reported and revised as required by this section, bears to the total crop of the same variety of fruit grown in the states of California and Arizona eligible for sale as defined in subsection 3 of this...