Charles R. Krimm Lumber Co. v. Turney

• Decision Date: 14 May 1948
• Docket Number: No. 449.,449.
• Citation: 168 F.2d 72
• Parties: CHARLES R. KRIMM LUMBER CO. et al. v. TURNEY, Director, Division of Liquidation, Department of Commerce.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

168 F.2d 72 (1948)

CHARLES R. KRIMM LUMBER CO. et al. v. TURNEY, Director, Division of Liquidation, Department of Commerce.

No. 449.

United States Emergency Court of Appeals.

Heard January 24, 1948.

Decided May 14, 1948.

Arthur G. Warner, of New York City, for complainants.

Josephine H. Klein, Sp. Atty., of Washington, D. C. (Tom C. Clark, Atty. Gen., T. Vincent Quinn, Asst. Atty. Gen., and Floyd L. Cook and Charles G. Mulligan, Attys., Department of Justice, and Irving R. Pressman, Gen. Counsel, and Samuel M. Singer, Atty., both of Division of Liquidation, Department of Commerce, all of Washington, D. C., on the brief), for respondent.

Before MARIS, Chief Judge, and MAGRUDER and McALLISTER, Judges.

Heard at New York City January 24, 1948.

MAGRUDER, Judge.

In this complaint, filed pursuant to § 204(a) of the Emergency Price Control Act of 1942, 56 Stat. 31, 50 U.S.C.A.Appendix, § 924(a), Charles R. Krimm Lumber Co., and the individual complainants, set forth that they are aggrieved by an order issued by the Director, Division of Liquidation, Department of Commerce, on October 24, 1947, dismissing their protests against the validity of provisions of Maximum Price Regulation 368 — Northeastern Hardwood Lumber, issued April 16, 1943 (8 F. R. 4968).

Respondent gave no consideration to the merits of the protests, but dismissed them on the ground of laches. In so doing he borrowed, and gave what to us is a wholly novel application of, a doctrine which has long obtained in courts of equity. "The doctrine of courts of equity to withhold relief from those who have delayed the assertion of their claims for an unreasonable length of time is thoroughly settled. Its application depends on the circumstances of the particular case. It is not a mere matter of lapse of time, but of change of situation during neglectful repose, rendering it inequitable to afford relief." O'Brien v. Wheelock, 1902, 184 U.S. 450, 493, 22 S.Ct. 354, 370, 46 L.Ed. 636. See Holmberg v. Armbrecht, 1946, 327 U.S. 392, 396, 66 S.Ct. 582, 90 L.Ed. 743, 162 A.L.R. 719; 4 Pomeroy, Equity Jurisprudence (4th ed. 1919) § 1442. It is certainly not true as a general proposition, that an administrative agency has inherent discretionary power to decline to perform a statutory function, where the application for administrative action, though made within the statutory time limit, has been unnecessarily delayed and as a result of the delay the administrative agency now deems the performance of the administrative function to have become unduly burdensome, by reason of reduction of staff or otherwise. Such a discretionary power may, of course, be conferred by legislative act. But, in the case before us, we have been unable to find any statutory warrant for the asserted power, either expressly or by fair implication.

On October 2, 1944, the Price Administrator filed in the United States District Court for the Middle District of Pennsylvania a treble damage action under § 205 (e) of the Emergency Price Control Act against the present complainants, charging that the corporate complainant had sold lumber at prices in excess of those established by MPR 368 and that the individual complainants were also liable therefor as officers and directors of the corporation. That enforcement action is still pending. One of the defenses sought to be raised therein was that the applicable provisions of MPR 368 were invalid. Were it not for the unique provisions of the Emergency Price Control Act, 50 U.S. C.A.Appendix, § 901 et seq., however long delayed the trial of the treble damage action might be, and however inconvenient it might become to the Price Administrator (or his successor) to assemble the economic data and other evidence in support of the validity of the regulation, the Administrator in pressing the enforcement action would have had to meet that defense of invalidity on the merits in the district court. There would have been no question of "laches".

But § 204(d) of the Act withdrew from the district court all jurisdiction or power to consider the validity of the regulation, and vested such jurisdiction exclusively in the Emergency Court of Appeals, and in the Supreme Court upon certiorari to that court. As the Act was originally drawn, the only way to obtain a judicial determination of the validity of a regulation was, first, to file a protest with the Price Administrator under § 203(a), and then, if the protest was denied, to file a complaint in the Emergency Court of Appeals under § 204(a). Except where the grounds of protest arose subsequently, the protest had to be filed within sixty days after the issuance of the regulation; otherwise a person subject to the regulation lost all right to challenge its validity, even as a defense to a criminal prosecution. The constitutionality of these provisions was sustained in Yakus v. United States, 1944, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834.

By the Stabilization Extension Act of 1944, 58 Stat. 632, Congress considerably relaxed these strict provisions of the Emergency Price Control Act. Section 203(a) was amended so as to permit the filing of a protest "at any time" after the issuance of a regulation. In Utah Junk Co. v. Porter, 1946, 328 U.S. 39, 66 S.Ct. 889, 90 L. Ed. 1071, the Supreme Court ruled that the phrase "at any time" meant what it said, remarking (at page 44 of 328 U.S., at page 892 of 66 S.Ct.) that, "in construing a definite procedural provision we do well to stick close to the text and not import argumentative qualifications from broad, unexpressed claims of policy." Also, by the Stabilization Extension Act of 1944, there was added a new subsection (e) to § 204 of the Price Control Act. Section 204(e) provided an alternative route to the Emergency Court of Appeals: A defendant in a civil or criminal enforcement suit might apply to the enforcement court for leave to file directly in the Emergency Court of Appeals a complaint against the Price Administrator setting forth objections to the validity of the regulation which the defendant is alleged to have violated, and the enforcement court was directed to grant such leave with respect to any objection which it found was made in good faith and with respect to which it found there was reasonable and substantial excuse for the defendant's failure to present such objection in a protest filed in accordance with § 203(a). Section 204(e) further made detailed provision for a mandatory stay of civil or criminal enforcement proceedings to await determination of the validity of the regulation, either in a pending protest proceeding with possible ensuing complaint in the Emergency Court of Appeals under § 204(a), or as the outcome of a complaint filed directly in the Emergency Court of Appeals under § 204(e) by leave of the enforcement court. In addition, § 204(e) (2) provided that, if any provision of a regulation "is determined to be invalid by judgment of the Emergency Court of Appeals * * * any proceeding pending in any court shall be dismissed, and any judgment in such proceeding vacated, to the extent that such proceeding or judgment is based upon violation of such provision."

As the law stood when the afore-mentioned enforcement suit was filed against complainants in October, 1944, they might have proceeded in either of two ways to procure an adjudication of the validity of the regulation: (1) Not having theretofore filed a protest, they might, within five days after judgment against them in the civil enforcement suit, have applied to the enforcement court for leave to file a complaint in the Emergency Court of Appeals under § 204(e), and if the court had granted such leave, it would have been accompanied by a mandatory stay of the enforcement proceeding as provided in § 204(e) (2) (i) and (iii); or (2) they might have filed a protest "at any time" under section 203(a),¹ though in this latter case they would not have been entitled to a stay of the enforcement proceedings, either before or after judgment, on account of the pendency of the protest proceedings, because a stay might be granted under § 204(e) (2) (ii) only where the protest had been filed prior to the institution of the enforcement proceeding. Complainants thus ran a certain risk under either of these alternatives. Under the first, they ran the risk that the enforcement court might deny them leave to file a complaint in the Emergency Court of Appeals under § 204(e), because the enforcement court might conclude either that the objections to the regulation had not been advanced in good faith or that there was no reasonable and substantial excuse for the defendant's failure to have presented such objection in a protest under § 203(a). Under the second, they ran the risk that even if, as a result of the protest proceeding and an ensuing complaint in the Emergency Court of Appeals under § 204(a), they should obtain a judgment of the Emergency Court of Appeals determining the regulation to be invalid, this judgment might come too late to do them any good in the enforcement proceeding. If on the date of the judgment of the Emergency Court of Appeals the enforcement proceeding was no longer pending, either in the district court or, we take it, on appeal, the judgment in the enforcement proceeding could not be reopened so as to give retroactive effect to a judgment of the Emergency Court of Appeals declaring the regulation to be invalid, for the concluding clause of § 204(e) read that, except as provided in this subsection, no retroactive effect should be given to any judgment setting aside a regulation or order under § 2. This clause referred back to the preceding sentence in the subsection stating that, if any provision of a regulation is determined to be invalid by judgment of the Emergency Court of Appeals, "any proceeding pending in any court shall be dismissed, and any judgment in such proceeding i.e., a proceeding pending in any court vacated, to the extent that such proceeding or...