Brown v. Hecht Co.

Decision Date19 February 1943
Docket NumberCivil Action No. 17995.
Citation49 F. Supp. 528
PartiesBROWN, Adm'r, Office of Price Administration, v. HECHT CO.
CourtU.S. District Court — District of Columbia

David Ginsburg, Gen. Counsel, Office of Price Administration, Brunson MacChesney, Asst. Gen. Counsel, Fleming James, Jr., Chief, Trial Litigation Branch, George M. Austin, Trial Litigation Atty., and Charles Prettyman, all of Washington, D. C., for plaintiff.

Spencer Gordon and Charles A. Horsky, of Covington, Burling, Rublee, Acheson & Shorb, both of Washington, D. C., for defendant.

LETTS, Justice.

The complaint recites that in the judgment of the Price Administrator the defendant has engaged in actions and practices which constitute a violation of Section 4(a) of the Emergency Price Control Act of 1942, Pub.L. 421, 77th Congress 2nd Session, C. 26, hereinafter called the Act, 50 U.S.C.A.Appendix § 904(a) in that it has violated The General Maximum Price Regulation, as amended, hereinafter referred to as the Regulation, issued pursuant to Section 2(a) of the Act, 50 U.S.C.A.Appendix § 902(a); and, therefore, pursuant to Section 205(a) of the Act, 50 U.S.C.A. Appendix § 925(a), the Price Administrator brings this action to enforce Section 4(a) of said Act and the Regulation.

The defendant is and has at all times mentioned herein been engaged in the sale and delivery of commodities in the retail mercantile business within the District of Columbia.

Pursuant to the provisions of Section 2 (a) of the Act, the Price Administrator published in the Federal Register The General Maximum Price Regulation, effective May 11, 1942 (7 F.R. 3153).

The General Maximum Price Regulation, insofar as the same is material here, provides in substance:

(a) That on and after the effective date of the Regulation no person shall sell or deliver any commodity at a price higher than the maximum price permitted by the Regulation (Section 1499.1).

(b) That the seller's maximum price for any commodity shall be the highest price charged by the seller in March, 1942, for the same or similar commodity (Section 1499.2).

(c) That the seller's maximum price for any commodity which cannot be determined as aforementioned (b) shall be determined by dividing the maximum price of the commodity by the replacement cost of the commodity, the percentage so obtained to be multiplied by the cost to him of the commodity being priced, and within 10 days after determining such maximum price the seller shall report said price to the Office of Price Administration upon a form duly filled out (Section 1499.3).

(d) Sellers of commodities subject to maximum prices shall preserve for examination all their existing records relating to the price which they charged for such commodities during March, 1942, and shall prepare on or before July 1, 1942, on the basis of all available information and records and thereafter keep for examination by any person a statement showing the highest price he charged during March, 1942, for those commodities sold and delivered or offered for sale or delivery during said month with an appropriate description or identification of each such commodity (Section 1499.11).

(e) Every person selling commodities, the maximum prices of which are set by the regulation, shall keep records showing as precisely as possible the basis on which he determined the maximum prices for those commodities (Section 1499.12).

(f) Every person offering to sell cost of living commodities at retail shall plainly mark in a manner visible to the purchaser the maximum price of such commodity and shall designate such price as the maximum or ceiling price (Section 1499.13).

Plaintiff says that the defendant company has violated the provisions of the General Maximum Price Regulation in the following particulars, to-wit:

(a) Defendant has failed, neglected and refused to use the standards and methods provided in Sections 1499.2 and 1499.3 of the Regulation to determine the maximum prices on commodities sold or delivered, or offered for sale or delivery, by it since May 18, 1942, which said maximum prices so determined were in excess of the maximum prices permitted by the Regulation.

(b) Defendant posted as its maximum prices on cost-of-living commodities offered for sale at retail by it after May 18, 1942, prices in excess of the maximum prices permitted by the Regulation (Section 1499.13).

(c) That since May 18, 1942, the defendant has sold or delivered, or offered for sale or delivery, commodities subject to The General Maximum Price Regulation at prices in excess of the maximum prices permitted by the Regulation (Section 1499.1).

(d) That the defendant did not on or before July 1, 1942, prepare and keep for examination by any person during ordinary business hours a statement in accordance with the Regulation (Section 1499.11 b1 and b2).

(e) That the defendant, though continuously engaged in the retail sale and delivery of commodities subject to the Regulation, has failed, neglected and refused to keep current records in conformity with the provisions of Section 1499.12 of said Regulation.

(f) That the defendant, though continuously engaged in the retail sale and delivery of cost-of-living commodities subject to the Regulation, did not on or before July 1, 1942, prepare and file with the appropriate War Price and Rationing Board a statement, relating to said cost-of-living commodities, in conformity with Section 1499.13 of said Regulation.

(g) That the defendant, though continuously engaged in the retail sale and delivery of cost-of-living commodities subject to the Regulation, has failed, refused and neglected to keep its statement, relating to said cost-of-living commodities, up to date in conformity with the provisions of Section 1499.13 of said Regulation.

The Price Administrator seeks an injunction enjoining the defendant, its officers, agents, servants, employees, attorneys and all persons in active concert or participation with the defendant from:

(1) Selling, delivering, or offering for sale or delivery, any commodity in violation of The General Maximum Price Regulation as heretofore or hereafter amended and attempting or agreeing to anything in violation thereof or in violation of any regulation adopted pursuant to said Section 2(a) establishing maximum prices for said commodities; and

(2) Failing to keep complete and accurate records for inspection by the Office of Price Administration as required by said General Maximum Price Regulation as heretofore or hereafter amended, or by any other regulation adopted pursuant to Section 201(d) of the Act requiring the making or keeping of records or the making of reports.

The requirements of the act and regulation are recent. The defendant company found it necessary to learn and understand the requirements of the act and the regulation and to plan and organize for compliance from and after the effective date. The opportunity to so prepare was meagre and the time allowed for compliance was brief. Violations occurred but I do not consider them numerous in view of the difficulties involved in defendant's efforts to comply with the act and regulation. The defendant company is a large retail establishment organized in seventy-five departments under the direct supervision of buyers and merchandise managers; its volume of business is approximately twenty million dollars per year; its employees range in number between nineteen hundred and two thousand; its inventory of January 30,...

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    ...75 S.Ct. 756, 99 L.Ed. 1083. 10 Hecht Co. v. Bowles, 1944, 321 U.S. 321, 329-330, 64 S.Ct. 587, 88 L.Ed. 754. 11 See 137 F.2d 689. 12 49 F.Supp. 528, 532. 13 Brown v. Hecht Co., 1943, 78 U.S.App. D.C. 98, 137 F.2d 14 320 U.S. 727, 64 S.Ct. 81, 88 L.Ed. 429. 15 Hecht Co. v. Bowles, 1944, 321......
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    ...to the court for injunctive relief. 1 Act of Jan. 30, 1942, 56 Stat. 23, 33, 50 U.S.C.A.Appendix, § 925(a). 2 Brown, Administrator, v. Hecht Company, D.C., 49 F.Supp. 528. 3 7 Fed.Reg. 4 We do not understand the court's findings to mean that the Company's violations of the Act were "unsubst......
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