Bowles v. American Brewery

• Decision Date: 03 January 1945
• Docket Number: No. 5267.,5267.
• Citation: 146 F.2d 842
• Parties: BOWLES, Adm'r, Office of Price Administration, v. AMERICAN BREWERY, Inc.
• Court: U.S. Court of Appeals — Fourth Circuit

146 F.2d 842 (1945)

BOWLES, Adm'r, Office of Price Administration, v. AMERICAN BREWERY, Inc.

No. 5267.

Circuit Court of Appeals, Fourth Circuit.

January 3, 1945.

COPYRIGHT MATERIAL OMITTED

Albert M. Dreyer, Atty., Office of Price Administration, of Washington, D. C. (Thomas I. Emerson, Deputy Administrator for Enforcement, Fleming James, Jr., Director, Litigation Division, David London, Chief, Appellate Branch, and Edward H. Hatton, Atty., all of Washington, D. C., Daniel B. Leonard and Francis Key Murray, Attys., both of Baltimore, Md., and Paul Ross, Regional Enforcement Executive, Office of Price Administration, of New York City, on the brief), for appellant.

Wilson K. Barnes, of Baltimore, Md. (Carman, Anderson & Barnes, of Baltimore, Md., on the brief), for appellee.

Before PARKER and DOBIE, Circuit Judges, and HARRY E. WATKINS, District Judge.

PARKER, Circuit Judge.

This is an appeal from a judgment dismissing an action brought by the Administrator, Office of Price Administration, to recover damages from the American Brewery, Inc., pursuant to section 205(e) of the Emergency Price Control Act of 1942, 56 Stat. 23, 34, 50 U.S.C.A.Appendix § 925(e), for violations of the General Maximum Price Regulation, 7 Fed.Reg. 3153, in the sale of malt syrup at prices in excess of the maximum price allowed by the regulation. The complaint alleged that the defendant manufactured from cereals malt syrup for sale in the domestic brewing industry; that, between January 19, 1943 and December 31, 1943, it made sales at prices in excess of the highest price charged in March 1942; and that the syrup so sold was purchased by buyers for use or consumption in the course of trade or business. A motion was made to dismiss the action on the ground that the syrup was not subject to price regulation during the period when the sales were alleged to have been made. The court sustained the motion (56 F.Supp. 82) and plaintiff has appealed.

We are not here concerned with the validity of the price fixing regulation, the violation of which furnishes the basis of the suit. It is well settled that this is a matter within the exclusive jurisdiction of the Emergency Court of Appeals. See sec. 204(d) of Emergency Price Control Act of 1942, 56 Stat. 23, 50 U.S.C.A.Appendix § 924(d); Yakus v. United States, 321 U.S. 414, 429, 64 S.Ct. 660, 669 et seq. That court is given exclusive jurisdiction over questions as to the validity of price regulations, whether such validity be tested by constitutional requirement, by the grant of power in the statute under which they were adopted or by the modifications made in that grant of power by subsequent legislation. Cf. United States v. Pepper Bros. 3 Cir. 142 F.2d 340, 343. Whether the Administrator in promulgating a regulation has complied with statutory requirements is, of course, a question affecting the validity of the regulation, as to which exclusive jurisdiction is vested in the Emergency Court of Appeals. Rosensweig v. United States, 9 Cir., 144 F.2d 30.

The present appeal involves but four questions which we can consider, viz.: (1) Whether a ceiling price was established for malt syrup under the general maximum price regulation; (2) if so, whether the ceiling was repealed by the Inflation Control Act of 1942, 50 U.S.C.A.Appendix §§ 901, 961 et seq. or Executive Order No. 9250 promulgated thereunder, 50 U.S.C.A. Appendix § 901 note; (3) whether the provision of section 205(e) of the Emergency Price Control Act under which this suit is brought is valid and constitutional; and (4) whether the suit should be dismissed because there is no allegation that it was authorized by the Secretary of Agriculture or instituted by one of the attorneys authorized to institute such proceedings by General Order No. 3 of the Office of Price Administration.

1. Ceiling Price Was Established

The malt syrup produced by the defendant was unquestionably covered by the maximum price regulation. That regulation, as the administrator said in his first quarterly report to Congress, applied to prices at all levels — manufacturing, wholesale and retail — of every commodity or product, domestic or imported, that was neither covered by a separate O.P.A. regulation nor specifically excluded. The pertinent parts of the regulation are as follows:

"1499. 1 * * * (a) No person shall sell or deliver any commodity, and no person shall supply any service, at a price higher than the maximum price permitted by this General Maximum Price Regulation; * * *".

"1499. 2 Maximum prices for commodities and services; General provisions. Except as otherwise provided in this General Maximum Price Regulation, the seller's maximum price for any commodity or service shall be: (a) In those cases in which the seller dealt in the same or similar commodities or services during March 1942: The highest price charged by the seller during such month — (1) for the same commodity or service; * * *".

The regulation, in section 1499.9, contained a list of commodities excepted from its provisions, including raw and unprocessed agricultural commodities and certain agricultural products which had been processed; but malt syrup was not embraced in the list of excepted commodities. It is clear, therefore, under the principle expressio unius est exclusio alterius, that malt syrup is not excluded by the excepting provision of the regulation but falls within the general provision establishing ceiling prices.

It is argued that the regulation should be construed as not applicable to malt syrup because it is said that such syrup is an agricultural commodity, that no action may be taken with respect to an agricultural commodity without the approval of the Secretary of Agriculture under section 3(e) of the Emergency Price Control Act, 50 U.S.C.A.Appendix § 903 (e), and that there is no allegation that the regulation had the approval of the Secretary of Agriculture. Since the regulation clearly covers all commodities not excepted from its provisions and malt syrup is not excepted, the question raised by this argument is simply whether the regulation is valid as applied to malt syrup, a question of which the Emergency Court of Appeals has exclusive jurisdiction; but, if it be treated as properly a question of interpretation, we think that there is nothing whatever in defendant's contention, since it is perfectly clear that malt syrup is not an agricultural commodity within the meaning of section 3(e) of the Act.

Malt syrup is a syrup used in the manufacture of beer and is made from barley malt. It is manifestly not a raw or unprocessed agricultural commodity but a commodity processed or manufactured from an agricultural commodity. Section 3 of the Emergency Price Control Act, 50 U.S.C.A.Appendix § 903, makes a clear distinction between such commodities. Subsection (a) of that section forbids the establishment of maximum prices for agricultural commodities at less than certain prices, whereas subsection (c) forbids the establishment of maximum prices for commodities processed or manufactured from an agricultural commodity below a price which "will reflect" those prices to producers of the commodities from which they are processed or manufactured. The prices of "agricultural commodities" which are taken as standards under subsection (a) are to be determined and published by the Secretary of Agriculture; and the prohibition of subsection (e) upon which reliance is placed is that no action shall be taken by the price administrator "with respect to any agricultural commodity" without the prior approval of the Secretary of Agriculture. It is perfectly clear, therefore, from the language of the statute itself, that this prohibition has relation to the agricultural commodities dealt with in subsection (a) and not to the processed or manufactured commodities dealt with in subsection (c). United States v. Charney, D.C., 50 F.Supp. 581, 583.

That this is the correct interpretation of subsection (e) is clearly shown by its history. That subsection was added to section 3 of the act through an amendment offered by Senator Bankhead. The amendment, as originally offered, prohibited action without approval by the Secretary of Agriculture "with respect to any agricultural commodity or commodity processed or manufactured in whole or substantial part from any agricultural commodity." Before the adoption of the amendment, however, the words above italicized were stricken from it; and the debate with respect thereto shows clearly that it was the intention of Congress that commodities processed or manufactured from agricultural commodities should not be included within its prohibition. 88 Cong. Record 160, 173, 180, 186, 77th Cong. 2nd Sess.; 9 Law and Contemporary Problems p. 39.

2. Ceiling Price Not Repealed or Suspended

There is nothing in the Inflation Control Act of Oct. 2, 1942, 50 U.S.C.A. Appendix §§ 901, 961 et seq. or in Executive Order No. 9250 adopted Oct. 2, 1942 pursuant thereto, which repeals or suspends in any way the ceiling price on malt syrup. On the contrary, it is expressly provided by section 7(c) of that Act, 50 U.S.C.A. Appendix § 967(c):

"Nothing in this Act shall be construed to invalidate any provision of the Emergency Price Control Act of 1942 (except to the extent that such provisions are suspended under authority of section 2), or to invalidate any regulation, price schedule, or order issued or effective under such Act."

That it was not intended that this statute should repeal any regulation or price schedule is made abundantly clear in the Senate Report on this section (Senate Report No. 1609, 77th Cong. 2nd Sess.(1942) at p. 10), which states:

"Section 7(c) provides that nothing in the resolution shall be construed to invalidate...