DeRieux v. Five Smiths, Inc.

• Decision Date: 21 October 1974
• Docket Number: No. 5-6 to 5-8.,5-6 to 5-8.
• Citation: 499 F.2d 1321
• Parties: Burt DeRIEUX et al., Plaintiff-Appellee, v. The FIVE SMITHS, INC., Defendant-Appellant. The FIVE SMITHS, INC., Plaintiff-Appellant, v. William H. HOLLAWAY et al., Defendants-Appellees. UNITED STATES of America, Plaintiff-Appellee, v. The FIVE SMITHS, INC., Defendant-Appellant.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

499 F.2d 1321 (1974)

Burt DeRIEUX et al., Plaintiff-Appellee, v. The FIVE SMITHS, INC., Defendant-Appellant.

The FIVE SMITHS, INC., Plaintiff-Appellant, v. William H. HOLLAWAY et al., Defendants-Appellees.

UNITED STATES of America, Plaintiff-Appellee, v. The FIVE SMITHS, INC., Defendant-Appellant.

Nos. 5-6 to 5-8.

Temporary Emergency Court of Appeals.

June 20, 1974.

Certiorari Denied October 21, 1974.

COPYRIGHT MATERIAL OMITTED

Emmet J. Bondurant, Kilpatrick, Cody, Rogers, McClatchey & Regenstein, Atlanta, Ga. (Martin E. Kilpatrick, Matthew H. Patton and Susan A. Cahoon, Atlanta, Ga., on the brief) for appellant The Five Smiths, Inc.

James A. Eichelberger, Greene, Buckley, DeRieux & Jones, Atlanta, Ga., for appellee Burt DeRieux.

Paul T. Michael, Atty., U. S. Dept. of Justice (Carla A. Hills, Asst. Atty. Gen., and Stanley D. Rose, Atty., Dept. of Justice, on the brief) for appellee U. S.

Before TAMM, Chief Judge, and VAN OOSTERHOUT and HASTINGS, Judges.

Certiorari Denied October 21, 1974. See 95 S.Ct. 176.

HASTINGS, Judge.

These consolidated cases are before us pursuant to § 211 (c) of the Economic Stabilization Act of 1970, as amended¹ (the amended Act), upon certification by the district court of substantial constitutional issues. We granted the joint motion of the parties to have the entire cases in Nos. 5-7 and 5-8 presented to us for consideration, and subsequently ordered that No. 5-6 be consolidated therewith. Since it now appears that all facts necessary for a complete adjudication of this controversy have been stipulated,² we shall exercise our discretion under § 211 (c) to decide the cases in their entirety at this time.³

At the heart of all three cases is a single question: did the Atlanta Falcons professional football team violate the Economic Stabilization Act by playing football games during the "Phase I" price freeze at prices which exceeded those charged for games played during 1970? Phase I was initiated by Executive Order 11615, 36 Fed.Reg. 15727 (1971), and was effective during the 90-day period from August 15 through November 13, 1971.

The Five Smiths, Inc. (the Falcons) operate the Atlanta Falcons as a member of the National Football League (NFL). In No. 5-6, the Falcons are defendant in a class action brought by Burt DeRieux, an Atlanta lawyer, on behalf of all season ticket holders for the 1971 Falcons football season. DeRieux originally sought reimbursement of illegal overcharges. By amendment to the complaint he now additionally seeks treble damages, attorneys fees and costs under § 210(b) of the amended Act.

No. 5-7 is an action by the Falcons against the Office of Emergency Preparedness (OEP), its Director and Regional Director, the Cost of Living Council (CLC), the Executive Director and individual members of the CLC, and the Commissioner of Internal Revenue. The complaint seeks declaratory and injunctive relief against the application and enforcement of the Phase I freeze with respect to Falcons 1971 football ticket prices.

Finally, No. 5-8 was brought by the United States pursuant to § 205 of the original Economic Stabilization Act of 1970⁴ (the 1970 Act), to enjoin ticket price violations and to require the Falcons to refund amounts already illegally received.

The docket numbers of the cases reflect the order in which they were filed during September, 1971, all in the Northern District of Georgia. Proceedings in all three cases eventually were stayed, by agreement of the parties, pending the outcome of similar litigation involving University of Southern California season football tickets. See University of Southern California v. Cost of Living Council, T.E.C.A., 472 F.2d 1065 (1972). A petition for certiorari in University of Southern California was denied by the Supreme Court on February 20, 1973. 410 U.S. 928, 93 S.Ct. 1364, 35 L.Ed.2d 590. Thereafter, the Government filed motions for summary judgment in Nos. 5-7 and 5-8. Without reaching the merits of the motions, the district court on February 6, 1974 certified the constitutional issues in all three cases to this court.

In 1970, the Falcons' management decided to raise ticket prices for home games during the 1971 football season. The price increases were announced in January, 1971, and amounted to $1.50 and $2.50 per game, depending upon seat location. Prices were not raised for a few "ground" and "field level" seats; however, such seats represented a small percentage of the 58,000-seat capacity of Atlanta Stadium. Sales of season tickets at the new prices were commenced on February 1, 1971, at which time the Falcons mailed order forms for 1971 season tickets to past season ticket holders. By the end of June, 41,590 season tickets had been sold and fully paid for. These tickets were mailed to purchasers on August 2, 1971, and all were delivered prior to August 15, the date the freeze went into effect.

The Falcons played five home games during the freeze, the first of which was a pre-season "exhibition" game. Unlike many NFL teams, the Falcons did not play any exhibition games at home prior to August 15. Of the total number of individual game tickets eventually sold for the five games played during the freeze, 217,151 were sold prior to August 15 (mostly in the form of season tickets) and 45,601 were sold thereafter. The amount of revenue from these five games which is attributable to the challenged price increases is $407,912.00. It is this sum (trebled in No. 5-6)⁵ which is the subject of the present litigation.

The Falcons' argument before this court may fairly be described as a frontal assault upon two decisions which have become fixtures in the scheme of economic stabilization law. Amalgamated Meat Cutters & Butcher Workmen v. Connally, D.D.C., 337 F.Supp. 737 (1971) (Meat Cutters), decided by a three-judge district court prior to the establishment of the Temporary Emergency Court of Appeals, upheld the constitutionality of the Economic Stabilization Act as it existed in August, 1971, when Phase I was initiated. Even more fundamental to the development of the law of this court has been University of Southern California v. Cost of Living Council, supra (USC). The rather narrow issue decided in that case—whether the Phase I freeze applied to tickets sold prior to the freeze for sporting events occurring during the freeze—apparently has not been laid to rest. See Manning v. University of Notre Dame Du Lac, T.E.C.A., 484 F.2d 501 (1973); Oakland Raiders v. Office of Emergency Preparedness, N.D.Calif. (No. C-71-2213, Jan. 2, 1974), appeal docketed, T. E.C.A. No. 9-11 (March 21, 1974); and cf. Murphy v. O'Brien, T.E.C.A., 485 F.2d 671 (1973). Broader reliance has come to be placed upon a more general aspect of USC, namely, the opinion's analysis and application of the "great deference test" in the context of economic controls administration. USC, supra, pp. 1068-1069. See United States v. IBEW Local 11, T.E.C.A., 475 F.2d 1204, 1209 (1973); Plumbers Local 519 v. Construction Industry Stabilization Committee, T.E.C.A., 479 F.2d 1052, 1056 (1973); Baldwin County Electric Membership Corp. v. Price Commission, T.E. C.A., 481 F.2d 920, 923, cert. denied, 414 U.S. 909, 94 S.Ct. 230, 38 L.Ed.2d 147 (1973); Pacific Coast Meat Jobbers Association, Inc. v. Cost of Living Council, T.E.C.A., 481 F.2d 1388, 1392 (1973); Murphy v. O'Brien, supra, p. 674; City of Groton v. Federal Power Commission, T.E.C.A., 487 F.2d 927, 934 (1973); United States v. Ohio, T.E.C.A., 487 F.2d 936, 941 (1973), cert. granted, 415 U.S. 912, 94 S.Ct. 1406, 39 L.Ed.2d 466 (Feb. 19, 1974). See also, United States v. Lieb, T.E.C.A., 462 F.2d 1161, 1166 (1972), decided prior to USC.

In arguing that Meat Cutters and USC were wrongly decided, the Falcons offer five contentions which form the principal issues common to all three cases now under consideration:

(1) Properly interpreted, Executive Order 11615 does not forbid these price increases;

(2) The Economic Stabilization Act of 1970, as it existed during Phase I, represents an unconstitutional delegation of legislative authority to the executive branch of the Government;

(3) Executive Order 11615 violated § 202(b) of the Economic Stabilization Act;

(4) Executive Order 11615 and the regulations issued thereunder violated § 553 of the Administrative Procedure Act; and

(5) The application of Executive Order 11615 to forbid these price increases represents (a) an unconstitutional bill of attainder or ex post facto law; (b) an unconstitutional taking of property without just compensation; and (c) an unconstitutional deprivation of due process of law.

No. 5-6 raises a sixth issue, namely, whether either the 1970 Act or the December 22, 1971 amendments thereto⁶ (the 1971 Amendments) created a private right of action to recover for Phase I price violations occurring prior to the enactment of the amendments.

Issues 1 and 2 only were actually litigated in USC and Meat Cutters. With respect to such issues, the Falcons urge that we overrule USC and refuse to follow Meat Cutters. The Falcons have mounted their attack with skill and resolve, as evidenced by their principal brief of 155 pages. Still, we are not persuaded. We have concluded that the Falcons violated a lawful Executive Order issued pursuant to a constitutional statute, and that the ticket price increases must be refunded.

We have further concluded in No. 5-6 that violations of the Order which occurred during the Phase I freeze period are not subject to private actions by individual or class plaintiffs.

I

Executive Order 11615 and the relevent regulations and interpretations issued thereunder are fully described in the USC opinion, 472 F.2d at 1066-1067. We have set out the pertinent section of the Order below.⁷ In brief, the Order established a 90-day freeze on prices, rents, wages and salaries, effective August 15, 1971. Permissible price levels were to be determined by reference to the nearest preceding 30-day period during which a ...