Bowles v. May Hardwood Co.

• Decision Date: 25 February 1944
• Docket Number: No. 9548.,9548.
• Citation: 140 F.2d 914
• Parties: BOWLES, Administrator, O. P. A., v. MAY HARDWOOD CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

140 F.2d 914 (1944)

BOWLES, Administrator, O. P. A., v. MAY HARDWOOD CO. et al.

No. 9548.

Circuit Court of Appeals, Sixth Circuit.

February 25, 1944.

David London, of Washington, D. C. (George J. Burke, Thomas I. Emerson, Fleming James, Jr., David London, David Reich, and Edward H. Hatton, all of Washington, D. C., and Raymond Stephenson, of Louisville, Ky., on the brief), for appellant.

Robert P. Hobson, of Louisville, Ky. (A. C. Van Winkle and Woodward, Dawson & Hobson, all of Louisville, Ky., on the brief), for appellees.

Before HICKS, SIMONS, and MARTIN, Circuit Judges.

SIMONS, Circuit Judge.

Brown, former Administrator of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 901 et seq. (now succeeded), sued, pursuant to § 205(a), to restrain the appellees from further violation of § 4(a), asserting that in his judgment they had violated Maximum Price Regulation No. 146 as amended. Upon the filing of an amended complaint by the Administrator, reciting the revocation of certain maximum ceiling prices in Regulation 146, the appellees moved to dismiss the bill, as amended, because the question raised therein had become moot and of no legal effect. The motion was sustained and a judgment of dismissal having been entered, the Administrator appeals.

Regulation 146 set maximum prices for hardwood lumber in the Appalachian region. In the case of "non-recurring specials," grades of lumber which had not been quoted by the mill in its regular price list for 1941 and 1942, the price was to be calculated by applying to the prices specially promulgated for regular grades whatever differential would have been applied in October, 1941. Such price, however, was subject to approval or rejection by the Administrator. For this purpose the seller was required to submit a report to the Office of Price Administration within thirty (30) days of the contract date, and the price was considered approved unless rejected by the Administrator within thirty (30) days after he had received the report. The Regulation also provided that brokers' commissions on shipments from mill to buyer should be deducted from the amount received by the mill and not added to the buyer's price. In July and November, 1942, the appellees purchased white oak bending stock, a "non-recurring special," from a mill for direct shipment to Associated Shipbuilders. They added their commissions to the ceiling price resulting in payments by Associated in excess of the maximum permitted by the Regulation. On December 14, 1942, Maximum Price Regulation 281 superseded part of Regulation 146; it applied ceilings to oak bending stock considerably higher than those applicable under 146, and admittedly higher than the prices charged by the appellees in their July and November transactions with Associated. Notwithstanding this change in the Regulation the Administrator brought suit in February, 1943, against the appellees for charging too much, and against Associated for excess payment.

The appellees defend the judgment on the ground that Regulation 146 was so indefinite and uncertain as to make enforcement impossible in respect to white oak bending stock, and also on the ground that there is, in fact, no basis for granting an injunction against future violations because what was unlawful under Regulation 146 is no longer so under Regulation 281, and as a subordinate contention urge that § 205(a), relating to injunctions, is, by its terms, not mandatory but merely permissive, if, in the judgment of the court, the facts of a particular case demand it. Cf. Brown v. Hecht Co., App.D.C., 137 F.2d 689. We give no consideration to the first basis for supporting the judgment. The issue was neither raised nor tried. No answer was filed, and both the motion to dismiss and judgment were grounded solely upon the assumed moot character of the controversy. Nor are we at this time concerned with the question whether, by § 205(a), printed in the margin,¹ the issue of an injunction, in case of violation, is mandatory or rests within the sound discretion of the court, since discretion was neither sought nor exercised. The sole issue perceived is whether there exists an actual present controversy between the Administrator and the appellees in respect to the issue of an injunction, and upon this issue the language of § 205(a) becomes important without regard to whether its character is mandatory or permissive.

As we understand the argument it is to the effect that there can be no basis for granting an injunction against future violations of the Emergency Price Control Act, based upon past violation of price Regulation 146, in respect to the ceiling on white oak bending stock, because that ceiling has now been raised by Regulation 281, so that even if the appellees continue sales of such stock at former prices, they no longer violate the applicable regulation and restraint is futile. The contention has seeming persuasiveness but complete understanding of the factual situation disclosed by the amended complaint, and matured consideration of applicable law, compels its rejection.

The circumstances under which, and the extent to which an administrative agency or a court is empowered to restrain future violations of law based upon past conduct, is fully and clearly expounded in N.L.R.B. v. Express Publishing Co., 312 U.S. 426, 435, et seq., 61 S.Ct. 693, 85 L.Ed. 930. There it was pointed out that the breadth of an administrative order, like the injunction of a court, must depend upon the circumstances of each case, the purpose being to prevent violations, the threat of which in the future is indicated because of their similarity and relation to those unlawful acts which have been found to have been committed in the past. While "A federal court has broad power to restrain acts which are of the same type * * * as unlawful acts which the court has found to have...