Berdie v. Kurtz

• Citation: 75 F.2d 898
• Decision Date: 04 March 1935
• Docket Number: No. 7657.,7657.
• Parties: BERDIE et al. v. KURTZ et al.
• Court: U.S. Court of Appeals — Ninth Circuit

75 F.2d 898 (1935)

BERDIE et al. v. KURTZ et al.^*

No. 7657.

Circuit Court of Appeals, Ninth Circuit.

March 4, 1935.

Harold M. Stephens, Asst. Atty. Gen., and Peirson M. Hall, U. S. Atty., and Clyde Thomas, Asst. U. S. Atty., both of Los Angeles, Cal., Carl McFarland, Mac Asbill, and A. H. Feller, Sp. Assts. to Atty. Gen., and Jerome N. Frank, General Counsel, Agricultural Adjustment Administration, Arthur C. Bachrach, Sp. Advisor to General Counsel, A. A. A., John J. Abt, Chief of Litigation Section, A. A. A., Donald B. MacGuineas, and M. Camper O'Neal, Attys., A. A. A., all of Washington, D. C., for appellants.

Lewis D. Collings, Edward M. Selby, H. C. Johnston and Walter F. Haas, all of Los Angeles, Cal., William T. Selby, of Ventura, Cal., and Amos Friedman, of Los Angeles, Cal., for appellees.

Before WILBUR and GARRECHT, Circuit Judges, and CAVANAH, District Judge.

WILBUR, Circuit Judge.

For a statement of facts we quote from the appellants' brief as follows:

"This is an appeal from interlocutory orders entered on September 20, October 1, and October 3, 1934, by the District Court for the Southern District of California. The order entered September 20, 1934, temporarily enjoined appellants (defendants below) from enforcing or attempting to enforce as against the appellees, the Agricultural Adjustment Act (title 7, U. S. C., c. 26 7 USCA § 601 et seq.) and two milk licenses issued by the Secretary of Agriculture, pursuant to section 8 (3) of that Act 7 USCA § 608 (3), and from making any of the demands and committing any of the acts with relation to the appellees complained of in the original and supplemental bill of complaint. The orders of October 1 and October 3, 1934, denied appellants' motions to dismiss appellees' original and supplemental bill of complaint and to vacate the temporary injunction entered September 20 as aforesaid.

"`Sections of the Act Here Involved.

"`The provisions of the Agricultural Adjustment Act here involved are as follows:

"`Declaration of Emergency.

"`That the present acute economic emergency being in part the consequence of a severe and increasing disparity between the prices of agricultural and other commodities, which disparity has largely destroyed the purchasing power of farmers for industrial products, has broken down the orderly exchange of commodities, and has seriously impaired the agricultural assets supporting the national credit structure, it is hereby declared that these conditions in the basic industry of agriculture have affected transactions in agricultural commodities with a national public interest, have burdened and obstructed the normal currents of commerce in such commodities, and render imperative the immediate enactment of title I of this Act.' 7 USCA § 601. * * *

"Three different methods for carrying out the declared policy are provided in section 8 of the Act, which reads in part as follows:

"`Sec. 8. In order to effectuate the declared policy, the Secretary of Agriculture shall have power — * * *

"`(3) To issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing Acts of Congress or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof. The Secretary of agriculture may suspend or revoke any such license, after due notice and opportunity for hearing, for violations of the terms or conditions thereof. Any order of the Secretary suspending or revoking any such license shall be final if in accordance with law. Any such person engaged in such handling without a license as required by the Secretary under this section shall be subject to a fine of not more than $1,000 for each day during which the violation continues.' 7 USCA § 608 (3).

"The only provision of the Act involved in this case is section 8 (3).

"The Los Angeles Milk Licenses.

"Pursuant to section 8 (3) of the Act, a license for milk, Los Angeles Milk Shed, license No. 17, was issued by the Secretary of Agriculture on November 16, 1933. This license was terminated by the Secretary pursuant to its terms on May 31, 1934, and at the same time the Secretary issued a License for Milk, Los Angeles, California, Sales Area, License No. 57, which has been in effect continuously since that date.

"Both licenses are blanket licenses and license all distributors engaged in distributing milk for consumption in the Los Angeles Sales Area to engage in business upon the terms and conditions therein provided. The licenses require every distributor in the Los Angeles Sales Area to pay producers for their milk the minimum prices fixed in the license, and also fix a schedule of minimum resale prices below which distributors are forbidden to sell milk or cream at retail. All other provisions of the licenses are merely a part of a plan to insure that producers shall receive fair prices for their milk. The appellees were formerly engaged in the distribution of milk and cream for consumption in the Los Angeles Sales Area and as such were licensed under both licenses. The second license, issued on May 31, 1934, provides, among other things, that the failure of a distributor to fulfill all of his obligations under the original license shall constitute a violation of the second license.

"Appellant Berdie since February 26, 1934, has not been in the employ or connected with the Agricultural Adjustment Administration, United States Department of Agriculture. The appellant Milk Producers, Inc. is a corporation whose functions and duties under License No. 17 were to receive all milk in excess of the daily requirements for fluid consumption in Los Angeles, and to manufacture and dispose of this surplus milk in the form of manufactured dairy products. Its function in this capacity ceased with the termination of License No. 17. Appellants Cronshey, Corbett, Howells, Cameron, Lucas, Maharg, Marcus, Adamson, Day, Stabler, Buechert, Hibbert, Kuhrt, Platt, McOmie, Brice, Erwin, Read, Perkins and Weaver are members of the Los Angeles Milk Industry Board organized pursuant to License No. 17 and likewise have no official connection with License No. 57 now in force. Appellant Larsen is in charge of the Los Angeles office of the Field Investigation Section, Agricultural Adjustment Administration, United States Department of Agriculture, and as such investigates violations of the Agricultural Adjustment Act and reports the same to the Department of Agriculture at Washington, D. C. Appellant Darger is the Market Administrator appointed by the Secretary to supervise the operation of License No. 57. Appellant Hall is the United States Attorney for the Southern District of California.

"Appellants' Present Status With Respect to the Licenses.

"By virtue of the authority vested in him by section 8 (3) of the Act, and after full compliance with the procedure provided for in General Regulations, Agricultural Adjustment Administration, series 3, as amended, the Secretary of Agriculture, on July 28, 1934, found that appellees had violated License No. 17 in several respects and revoked the licenses of each of the appellees under License No. 57.

"On or about the effective date of the Orders of the Secretary of Agriculture revoking appellees' licenses, each of the appellees transferred to other persons or corporations that portion of their respective businesses having to do with the distribution, marketing, and handling of milk as distributors in the Los Angeles Sales Area and have not since such date engaged in the business of distributing milk in this area.

"The original bill was filed on January 11, 1934, and sought to enjoin appellants from taking any steps towards the revocation of appellees' licenses under License No. 17 and from making demands upon appellees to fulfill their obligations under this License. No order based on the original bill was entered by the court, and on July 28, 1934, as stated above, appellees' licenses were revoked by the Secretary of Agriculture. The supplemental bill of complaint, filed September 4, 1934, alleges the revocation of appellees' licenses by the Secretary. It also alleges that the appellants who are members of the Los Angeles Milk Industry Board and appellant Milk Producers, Inc., demanded of appellees that they make certain payments and that the amounts demanded `were not calculated in accordance with the provisions' of License No. 17 and that appellees did not receive a fair or impartial hearing at the administrative proceedings held for the purpose of determining whether or not their licenses should be revoked."

The appellees' business is conducted in the state of California and in the Los Angeles sales area. This area includes Los Angeles and Orange and parts of San Bernardino and Riverside counties, Cal., as described by the Secretary of Agriculture in license No. 17 "for milk, Los Angeles Milk Shed," issued November 16, 1933. The "Los Angeles Milk Shed" is the producing area likewise defined as those "dairy farms in the counties of Los Angeles, Riverside, San Bernardino and Orange * * * as were producing Grade A market milk on the effective date of this license" (November 20, 1933, 12:01 a. m., eastern standard time) and similar dairy farms outside said counties, "and such other dairy farms as may become entitled to produce milk for Grade A market milk." The "Los Angeles Cream Shed" means those dairy farms in the counties of Imperial, San Luis Obispo, Tulare, Kings, Madera, Ventura, Merced, Kern, Fresno, and Santa Barbara "producing or to produce such Grade A milk...