Conklin Pen Co. v. Bowles

• Decision Date: 11 January 1946
• Docket Number: No. 243.,243.
• Citation: 152 F.2d 764
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals
• Parties: CONKLIN PEN CO. v. BOWLES, Price Administrator.

152 F.2d 764 (1946)

CONKLIN PEN CO. v. BOWLES, Price Administrator.

No. 243.

United States Emergency Court of Appeals.

Heard November 30, 1945.

Decided January 11, 1946.

Jack H. Oppenheim, of Chicago, Ill., for complainant.

Jacob D. Hyman, Associate Gen. Counsel, of Washington, D. C. (Richard H. Field, Gen. Counsel, Josephine H. Klein, and Louis L. Rochmes, Attys., all of the Office of Price Administration, all of Washington, D. C., on the brief), for respondent.

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

Heard at Chicago November 30, 1945.

MARIS, Chief Judge.

The individual members of the complainant partnership have been doing business as the Conklin Pen Company since October 1, 1941. From the time of the issuance of the General Maximum Price Regulation¹ the complainant determined the ceiling prices of the fountain pens and mechanical pencils which it sold by the application of the March, 1942, freeze date method prescribed by that regulation.

The three styles of fountain pens and the fountain pen and mechanical pencil set herein involved are fabricated by the Paramount Pen Company and the Novelty Pen Company. The complainant supplies these companies with gold pen points, which it procures from another source, to be inserted in the fountain pens. No part of the mechanical pencils is supplied by the complainant. Paramount and Novelty sell the fountain pens to the complainant complete and ready for use.

On January 8, 1944, the Price Administrator notified the complainant by telegram that its prices for the four items here involved should be established in accordance with the fourth pricing method provided by Maximum Price Regulation 188 — Manufacturers' Maximum Prices for Specified Building Materials and Consumers' Goods other than Apparel.² On January 25, 1944, the complainant requested the Administrator to supply it with "price determination" for the four items. The Administrator issued Order No. 1617³ under Section 1499.158 of MPR 188 on May 18, 1944. This order established maximum prices for the complainant for the sale of each of the four items. The complainant is described in the order as the manufacturer.

On October 27, 1944, the Administrator issued Maximum Price Regulation 564 — Fountain Pens and Mechanical Pencils.⁴ The complainant is listed in a table of retail ceiling prices found in Section 23 of this regulation as the manufacturer of three of the four items covered by Order No. 1617. The complainant filed its protest against MPR 188 and Order No. 1617 on December 9, 1944. It has not filed a protest against MPR 564. On June 1, 1945, the Administrator dismissed the protest. The complaint in this court followed.

The complainant asserts that MPR 188, if properly interpreted, does not apply to manufacturers of fountain pens and mechanical pencils. It also urges that if interpreted to be applicable to such manufacturers, as the Administrator has construed it, the regulation is invalid for a number of reasons which it specifies. The Administrator urges that this court is not at liberty under these circumstances to determine for itself the proper construction of the regulation but must adopt his interpretation of it. There is thus raised a fundamental question of the judicial power of this court in cases coming to it upon the denial of a protest by the Administrator.

The Administrator's theory is that in a protest proceeding before him under Section 203 of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 923, the protestant must accept the interpretation which the Administrator has placed upon the protested regulation and may only raise in his protest objections directed to its validity when so interpreted. It follows, he says, that in a complaint filed under Section 204(a) of the Act, 50 U.S.C.A.Appendix, § 924(a), following the denial of a protest, the complainant may only raise and this court may only consider questions as to the validity of the regulation interpreted as it has been by the Administrator, and that the question whether the regulation has been properly interpreted as applicable to the complainant may not be raised or considered.

We do not think that the protest and review procedure of the Act may be thus restricted. It is true that we have said that mere questions of interpretation of the Administrator's regulations and orders are ordinarily not cognizable in this court. Marlene Linens v. Bowles, Em.App. 1944, 144 F.2d 874; Veillette v. Bowles, Em.App.1945, 150 F.2d 862. To this view we adhere. But where, as in this case, a protestant to whom a regulation has been construed by the Administrator to be applicable, asserts that if applied to him the regulation is invalid and at the same time contends that properly construed it is inapplicable to him, we think that he has the right to have the question of the proper meaning and interpretation of the protested regulation passed on in the protest proceedings and on review in this court. He is not compelled, as the Administrator suggests, to elect whether to assume the applicability of the regulation and attack its validity in a protest proceeding or to assume its validity and attack its applicability in a declaratory or enforcement proceeding.

A case filed in this court under Section 204(a) is a judicial review of the Administrator's action in denying the protest. It would be strange indeed if in such a proceeding the reviewing court were bound by the determination of the officer whose action is being reviewed as to the meaning of his regulation or order. For those acts have the force of law and their construction involves a question of law just as much as does the interpretation of a statute. Moreover, it is a question which may involve the standing of the complainant to maintain his suit. It is for these reasons that this court has held that in such a case we have power to determine whether the regulation under attack may fairly be interpreted as applying to the complainant before we decide the questions of validity which he raises. Alan Levin Foundation v. Bowles, Em.App.1945, 152 F.2d 467.

A case brought to this court under Section 204(e) (1) of the Act is in quite a different category. Such a case is not in any true sense an appeal from an action of the Price Administrator but, on the contrary, is merely ancillary to another suit which has been brought against the complainant in another court. In such a case the jurisdiction of the Emergency Court of Appeals is invoked by the complainant only with leave of the court in which the litigation is pending. It is invoked primarily for the purpose of enabling the complainant to establish the invalidity of the regulation involved in that litigation as a defense to be presented in that court. See Section 204(e) (2) of the Act. Except for the prohibition of Section 204(d) the defense could and would have been established in the primary court. But the complainant still has full opportunity to raise in that court the question of the applicability of the regulation to him and have it there judicially decided. Accordingly we have held in such a case that this court will accept the construction which the enforcement court has placed upon the regulation in question and will consider merely its validity as thus interpreted. Collins v. Bowles, Em.App.1946, 152 F.2d 760.

We therefore pass to the consideration of the question whether MPR 188 may fairly be interpreted as applicable to manufacturers of fountain pens and mechanical pencils. The complainant in urging that it does not apply to it points to the fact that by Amendment No. 10, effective April 5, 1943⁵ the definition of "manufacturer", contained in Section 1499.163(a) (3) of the regulation was amended to read:

"`Manufacturer' means the person who makes the first sale of an article listed in Appendix A (§ 1499.166) of this regulation after the article has been completed to the point indicated by the terminology of the appendix."

The complainant properly points out that the regulation applies only to sales by manufacturers who come within the terms of this definition. It asserts that manufacturers of fountain pens and mechanical pencils do not come within the purview of the definition because there is no terminology in Appendix A of the regulation which indicates the stage at which the manufacture of these articles is to be deemed to have been completed for the purposes of the regulation. Indeed, Appendix A of the regulation does not so much...