Bowles v. American Distilling Co.

• Decision Date: 06 July 1945
• Citation: 62 F. Supp. 20
• Parties: BOWLES, Price Administrator, v. AMERICAN DISTILLING CO., Inc., et al.
• Court: U.S. District Court — Southern District of New York

62 F. Supp. 20

BOWLES, Price Administrator, v. AMERICAN DISTILLING CO., Inc., et al.

District Court, S. D. New York.

July 6, 1945.

Paul L. Ross, of New York City (Elliott L. Biskind, of New York City, of counsel), for plaintiff.

Garey, Desvernine & Garey, of New York City, for defendant Sanhope Foster & Co.

Chapman & Keane, of New York City, for defendant Gorman.

William B. Herlands, of New York City, for defendant Brown.

John J. Burns, of New York City, for defendant American Distilling Co.

Edwin M. Slote, of New York City, for defendant Siskind.

RIFKIND, District Judge.

Several of the twenty-three defendants to the three-count complaint,¹ filed by the Price Administrator, have made five motions to dismiss the complaint on a variety of grounds. It will facilitate consideration of the questions presented for decision if each of the motions is treated separately.

1. Motion of American Distilling Co.: This defendant moves to dismiss counts 1 and 2 for failure to state a claim upon which relief can be granted and to dismiss count 3 for lack of jurisdiction and for failure to state a claim upon which relief can be granted; and, in the alternative, for a bill of particulars.

Count 1 is in the stereotyped form of complaint used by the O. P. A. when it seeks an injunction to restrain alleged violations of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq. Such an action is authorized by Section 205(a); jurisdiction is conferred by section 205(c); and the complaint so recites. It further alleges that in the judgment of the Administrator the defendants have engaged in acts and practices which constitute a violation of section 4(a) of the Act in that they have violated the provisions of MPR 193 and MPR 445; and specifically, that from November 27, 1943, to the date of the complaint they sold and delivered, and offered to sell and deliver, distilled spirits, and demanded and received prices therefor in excess of the applicable maximum prices established by said regulations.

The nub of defendant's objections is that "to state that twenty-three defendants all sold and delivered distilled spirits at over-ceiling prices, and offered to do so, is not to set forth `any acts or practices.'" I think it is. The complaint satisfies the requirement of Rule 8(a), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Such a complaint need not allege that "it was the practice of American Distilling Co. to sell distilled spirits at overceiling prices." The complaint need not specify particular sales or acts on the part of this defendant. The complaint must be read, on a motion to dismiss for insufficiency, as attributing the entire course of conduct described, to wit, the sale and offer to sell of distilled spirits at overceiling prices, to the moving defendant.

A complaint which charged that A and B committed the violation alleged herein would be good without an allegation of conspiracy. There is no logical reason why such omission should vitiate a complaint which charges the same violations against A plus B plus C, * * * plus N.

Count 1 states a claim against the moving defendant upon which relief can be granted and the motion to dismiss is, therefore, denied.

Count 2 of the complaint is brought under Section 205(e) of the Act and seeks damages equal to three times the amount ($538,535.) by which the defendants allegedly exceeded the permitted price maxima in the sale of distilled spirits, "between on or about the 6th day of December, 1943 and the 31st day of December, 1943." Jurisdiction is predicated on Section 205(c). Section 205(e) prescribes that actions thereunder by the Administrator may be instituted within one year from the date of the occurrence of the violation. This action was instituted on December 6, 1944. The time limitation expressed in 205(e) operates as a limitation of the liability itself as created, and not of the remedy alone. The Harrisburg, 1886, 119 U.S. 199, 214, 7 S.Ct. 140, 30 L.Ed. 358; Atlantic Coast Line R. Co. v. Burnette, 1915, 239 U.S. 199, 36 S.Ct. 75, 60 L.Ed. 226. And it has been held that where the time limitation is upon the right as created, the complaint must show that the claim is asserted within the permitted period. Stimpson Computing Scale Co. v. Lucas, D.C.W. D.Ky.1927, 39 F.2d 473; Rosenberg v. Hano & Co.D.C., E.D.Pa.1938, 26 F.Supp. 160.

The moving defendant argues that the phrase, "on or about the 6th day of December, 1943," has a certain elasticity, and that proof of the event some days before that date would satisfy the allegation, and therefore the complaint does not sufficiently allege that the violation occurred within the one year period prescribed by statute.

Many cases hold that there is no fatal variance between an allegation that an event occurred on or about a certain day and proof that the event occurred a reasonable period before or after the named day. Mazzarella v. Whelan, 1923, 276 Pa. 313, 120 A. 141; Kerr v. Blair, 1907, 47 Tex.Civ.App. 406, 105 S.W. 548, 551; Mitchell v. Prendergast, 1917, 178 App.Div. 690, 165 N.Y.S. 972. Cf. Conroy v. Oregon Construction Co., 9 Cir., Or., 1885, 23 F. 71; Lee v. Village of Greenwich, 1900, 48 App.Div. 391, 63 N.Y.S. 160. But this argument proves too much. Even if the allegation were to the effect that the event occurred on December 6th, proof that it occurred a few days before or after that day would not result in the plaintiff's non suit, absent circumstances which would render the disregard of the variance unjust. The common device is to move to conform the pleadings to the evidence under Rule 15(b). And, of course, if by the variance the plaintiff takes himself out of the statute upon which he sued, he cannot recover. The allegation made in the instant complaint permits proof of violation on October 6, 1943, and the plaintiff must prove a violation on that day or later in order to sustain his cause of action. In this category of cases the defendant is not obliged to plead limitations as a defense, Atlantic Coast Line R. R. v. Burnette, supra. Consequently, I think the complaint is not deficient in the challenged respect.

Nor do I think count 2 insufficient because it fails to allege specific sales. There is nothing in the statute which prohibits the bulking of many sales in a complaint, provided that all fall within the statutory period. It may be that, in order to prepare a responsive pleading, defendant is entitled to a bill of particulars; but the propriety of a bill does not require the dismissal of the complaint. I conclude that count 2 is sufficient in this respect as well.

The third count alleges that plaintiff is the Administrator of the O.P.A., that he promulgated MPR 193 and MPR 445, establishing maximum prices for distilled spirits and requiring the keeping of certain business records for examination by plaintiff; that he brings the action "as an officer of the United States for and on behalf of the United States"; that jurisdiction is conferred upon this court by Section 24(1) of the Judicial Code, 28 U.S.C.A. § 41(1); that the defendants conspired to and did deceive and defraud the plaintiff of his statutory right to recover damages from defendants by reason of the sale by them of distilled spirits at overceiling prices; that such sales occurred between June 11, 1943, and December 6, 1943; that they caused false entries to be made upon their required records "thereby falsely representing to plaintiff, upon an examination of said books and records which was made on behalf of plaintiff,"² that no more than the permitted prices had been charged, whereas in truth defendants had overcharged $1,225,589; that plaintiff, in reliance upon the said representations, refrained from asserting his claim within the period permitted by law and thereby lost his claim.

This count is challenged both for lack of jurisdiction and for insufficiency. I do not reach the second ground because I have concluded that the court is without jurisdiction.

Section 24(1) of the Judicial Code confers upon the district court jurisdiction, "of all suits of a civil nature, at common law or in equity, brought by the United States, or by any officer thereof authorized by law to sue." The Administrator is by law authorized to sue; but the nature of the proceedings he may initiate are specifically enumerated in the Act: (1) He may apply to the district court for an order in aid of his subpoena, 202(e); (2) he may sue for an injunction or for an enforcement order, 205(a); (3) he may certify the facts to the Attorney General when he has reason to believe that a criminal violation has been committed under the Act, 205(b); (4) he may intervene in actions between third parties where the Act or a regulation is the ground of claim or defense, 205(d); (5) he may institute treble damage actions "on behalf of the United States", 205(e); (6) he may sue for the suspension of a license, 205(f) (2); (7) he may petition the Supreme Court for a writ of certiorari to review a judgment of the Emergency Court of Appeals, 204(d).

Nowhere, in this meticulously arranged arsenal of weapons at the disposal of the Administrator, do I find power to bring common law actions for deceit. It would seem too clear for argument that the words of Section 24(1) of the Judicial Code, "authorized by law to sue" do not mean to sue in general but to prosecute the specific action under consideration. It would be strange indeed if the Commissioner of Patents, because he has capacity to sue for some purposes, should, by virtue of Section 24(1) acquire the power to sue generally in behalf of the United States. Plaintiff does not contend as much; but he does urge that plaintiff may sue at common law to carry out the duties assigned to him if his statutory powers are not sufficient for the purpose. This argument, however, begs the question: Is it part of the Administrator's duty to enforce claims for money damages in behalf of the United...