Atlantic Meat Co. v. Reconstruction Finance Corp.

• Decision Date: 08 May 1946
• Docket Number: No. 248.,248.
• Citation: 155 F.2d 533
• Parties: ATLANTIC MEAT CO., Inc., v. RECONSTRUCTION FINANCE CORPORATION.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

155 F.2d 533 (1946)

ATLANTIC MEAT CO., Inc., v. RECONSTRUCTION FINANCE CORPORATION.

No. 248.

United States Emergency Court of Appeals.

Heard December 21, 1945.

Decided May 8, 1946.

Lawrence Black, of Boston, Mass. (John A. Lyons, of Boston, Mass., on the brief), for complainant.

John C. Erickson, of Washington, D. C. (John D. Goodloe, George B. Stoner, and James L. Dougherty, all of Washington, D. C., on the brief), for respondent.

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

Heard at Boston December 21, 1945.

MAGRUDER, Judge.

Atlantic Meat Company, Inc., challenges the validity of a provision of Amendment No. 2 (9 F.R. 1820) to Regulation No. 3 (8 F.R. 10826) issued by the Defense Supplies Corporation, under which provision respondent has ruled that complainant was ineligible to receive the special subsidy of 80 cents per cwt. payable to non-processing slaughterers of cattle.¹

A motion by respondent to dismiss the complaint for lack of jurisdiction was denied by us on the authority of Illinois Packing Co. v. Snyder, Em.App.1945, 151 F. 2d 337.

Our opinion in Earl C. Gibbs, Inc. v. Defense Supplies Corporation et al., Em. App., 1946, 155 F.2d 525, sets forth in detail the background of this special subsidy to non-processing slaughterers, together with relevant statutory provisions and provisions of executive and administrative orders. These matters will not be repeated in extenso here.

During the period now in question, complainant was engaged in the slaughter of cattle, and sold 98 per cent or more of the total dressed carcass weight of cattle slaughtered by it in the form of carcasses or wholesale cuts. On November 1, 1943, when the special subsidy to non-processing slaughterers went into effect, complainant was wholly owned and controlled by General Foods Corporation. The latter corporation also owned and controlled Batchelder & Snyder Company, Inc. On and after April 3, 1944, the capital stock of complainant was directly owned by Batchelder & Snyder Company, Inc. Batchelder & Snyder is a hotel supply house, as that term is defined in RMPR 169. Hotel supply houses perform the functions of selecting, aging, boning and fabricating primal cuts into roasts, steaks, stews, etc., and otherwise preparing the meat ready for cooking. Under RMPR 169 they were allowed a liberal mark-up over applicable zone prices on sales of fabricated cuts to hotels and other purveyors of meals. See Oswald & Hess Co. v. Bowles, Em.App.1945, 148 F.2d 543, certiorari denied 1945, 325 U.S. 871, 65 S.Ct. 1411, 89 L.Ed. 1990.

Complainant put in its monthly claims for the special subsidy payable to non-processing slaughterers, but Defense Supplies Corporation disallowed the claims on the ground that complainant was not an "unaffiliated slaughterer" within the meaning of Amendment No. 2. On April 2, 1945, complainant filed with Defense Supplies Corporation its protest against the affiliation provisions of Amendment No. 2 whereunder non-processing slaughterers are ineligible for the special subsidy if they are "owned or controlled by a processor or purveyor of meat." On June 15, 1945, Defense Supplies Corporation by letter denied the protest, after which Atlantic Meat Company, Inc., filed the present complaint in this court.

As we explained in Earl C. Gibbs, Inc. v. Defense Supplies Corp. et al., supra, the purpose of the Directive of the Economic Stabilization Director issued October 25, 1943, was to make special provision by way of an extra subsidy to a limited group in the meat industry, namely, to those whose business consists entirely, or almost entirely, in the sale of dressed carcasses and wholesale cuts from the slaughter of cattle, and who derive no further profit, either direct or indirect, from processing operations in the broad sense. The term in the amended subsidy regulation denying the special subsidy to any slaughterer who is owned or controlled by a processor of meat is in our opinion a reasonable and appropriate provision for carrying into execution the general...