Detroit Creamery Co. v. Kinnane

• Decision Date: 23 April 1920
• Docket Number: 331.
• Citation: 264 F. 845
• Parties: DETROIT CREAMERY CO. et al. v. KINNANE et al.
• Court: U.S. District Court — Eastern District of Michigan

264 F. 845

DETROIT CREAMERY CO. et al. v. KINNANE et al.

No. 331.

United States District Court, E.D. Michigan, Southern Division.

April 23, 1920

Stevenson Carpenter, Butzel & Backus and D. B. Hayes, all of Detroit Mich., for plaintiffs.

James Green, of Lansing, Mich., for intervener.

John E Kinnane, U.S. Dist. Atty., of Bay City, Mich., for defendants.

TUTTLE District Judge.

The sole question involved in this case is whether the provision of section 4 of the Food Control Act, also known as the Lever Act, being the Act of Congress of August 10, 1917, c. 53, 40 Statutes at Large, 276 (Comp. St. 1918, Comp. St. Ann. Supp 1919, Sec. 3115 1/8ff), as amended by section 2 of the Act of October 22, 1919 (41 Stat. 298), making it unlawful for any person, among other things, 'to make any unjust or unreasonable rate or charge, in handling or dealing in or with any necessaries' is constitutional.

Plaintiffs filed their bill of complaint herein, alleging that they were engaged in the business of purchasing milk from producers thereof and preparing the same for the market and for resale distribution to the consumers thereof within the city of Detroit and adjacent territory; that the price of milk for the past several years in Detroit had been established between the producer and the distributor by the Detroit Milk Commission, 'a body composed of men who, by reason of continuing investigation and contact with the conditions properly entering into a reasonable price for the retail and wholesale sale of milk, have become practical experts'; that under the price schedule fixed from time to time by said commission the rights of the said producers and distributors, on the one hand, and of the public, on the other, had been properly protected, and that the price of milk per quart for sale at retail to the public had been prescribed for the month of March, 1920, at 16 cents per quart, based on a certain price to the producers as set forth in the bill; that the defendants, other than John E. Kinnane (the latter being United States attorney for this district), claimed that they composed a body designated as a 'Federal Fair Price Commission,' appointed under authority of the so-called Lever Act hereinbefore mentioned, and as such had attempted to prescribe a schedule for the sale of milk at retail to commence April 15, 1920, at 14 cents per quart; that said defendants did not hold any legal office, and that their action in attempting to prescribe such rate was void and of no effect; that the defendant Kinnane was the United States district attorney, as aforesaid, and as such had stated publicly that he would cause to be prosecuted any person failing to comply with the price schedule so prescribed by the so-called Fair Price Commission mentioned as a violation of the said Lever Act; that plaintiffs had in their employ upwards of 500 milk salesmen, selling their milk at retail to householders and consumers daily, and that the fines capable of being levied or claimed rightfully to be levied on one day's transactions against such salesmen would aggregate millions of dollars; that plaintiffs had in their retail milk business large numbers of vehicles of various kinds, representing many thousands of dollars; that by reason of the aforesaid threats of the defendants against plaintiffs said milk salesmen would not continue to deliver milk at lawful prices, and as a result of the claimed and usurped authority of the defendants, unless restrained, the business of the plaintiffs would be irreparably injured and destroyed; that in so far as said act undertook to make it unlawful for any person 'to make any unjust or unreasonable rate or charge, in handling or dealing in or with any necessaries,' it did not legally create any crime under the United States Constitution, particularly the Sixth Amendment thereto, for the reason that such alleged crime was expressed in such vague, indefinite, and uncertain manner, without any reasonably certain standard, as to be a violation of the rights of citizens of the United States, such as the plaintiffs; that the threatened criminal prosecution referred to would involve the plaintiffs in contractual difficulties and litigation over existing contracts for the supplying of milk to them, would result in the destruction of their established business, and would operate to deprive the plaintiffs of their property without due process of law, in violation of said Constitution, and that they were entitled to come into this court to enforce their federal rights thus threatened; that the defendants were claiming to act under color of the said Lever Act, but that, as such act is void, it affords them no justification, and renders them liable to be enjoined from inflicting upon plaintiffs the wrongs complained of, and that the plaintiffs had no adequate remedy at law, and this court had sole jurisdiction of the subject-matter of their grievance; that the said defendants other than the said Kinnane acted capriciously and without affording the plaintiffs any real opportunity to be heard, and without any proper examination or investigation into the facts, and that the price fixed by such so-called Federal Fair Price Commission was confiscatory and illegal.

Plaintiffs further challenged the constitutionality of said Lever Act on the grounds that it was vague, indefinite, and uncertain; that it fixed no immutable standard of guilt, but left such standard to the variance of the different courts and juries which might be called upon to enforce it; that it did not inform those accused of its violation of the nature of the accusation against them, nor as to what acts would constitute such violation; that it failed to define a crime, but in essence merely declared that any person who should commit any unjust or unreasonable act should be guilty of a felony; and that, if enforced, it would deprive citizens of the United States of their property and liberty without due or any process of law. Plaintiffs prayed that the defendants be enjoined temporarily and permanently from attempting to enforce the schedule of rates complained of, from interfering with the free conduct of their business by commencement of criminal proceedings or otherwise, and from harassing or oppressing them in the premises. The bill concluded with a prayer for general relief.

An answer was filed by the district attorney, in which he alleged that he and the other defendants constituted a body designated as the Federal Fair Price Committee, having been legally so appointed by the Attorney General of the United States; that as district attorney he approved of the judgment of said committee in its aforesaid action; that he had not made any statement or reached any determination as to any method of procedure against the plaintiffs for selling milk at excessive prices, but that it was probable that prosecution would be based on the provisions of said Lever Act, providing punishment for monopolizing or attempting to monopolize the milk supply of the city of Detroit, or for conspiring to limit the facilities for supplying milk to said city, or to restrict said supply or the distribution thereof in order to enhance the price thereof; that the arrangements under which the producers and distributors, including the plaintiffs, supplied milk to said city, deprived the latter, in an arbitrary and unreasonable manner, of its natural supply thereof, and restricted the free sale of milk to the people of said city; that the plaintiffs were making huge profits in handling and distributing milk in said city, and that a number of them had paid stock dividends and large cash dividends derived from the very large margin which they make per quart for distributing said milk; that the retail charge made by plaintiffs for...