Gay Union Corporation v. Wallace

• Citation: 112 F.2d 192,71 App. DC 382
• Decision Date: 26 February 1940
• Docket Number: No. 7402,7403.,7402
• Parties: GAY UNION CORPORATION, Inc., v. WALLACE, Sec. of Agriculture. CANAL BANK & TRUST CO. v. SAME.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

71 App. DC 382, 112 F.2d 192 (1940)

GAY UNION CORPORATION, Inc., v. WALLACE, Sec. of Agriculture. CANAL BANK & TRUST CO. v. SAME.

Nos. 7402, 7403.

United States Court of Appeals for the District of Columbia.

Decided February 26, 1940.

Writ of Certiorari Denied June 3, 1940.

K. Thomas Everngam and Horace S. Whitman, both of Washington, D. C., and Leonard B. Levy, of New Orleans, La., for appellants.

John S. L. Yost and W. Carroll Hunter, Sp. Assts. to Atty. Gen., for appellee.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

Writ of Certiorari Denied June 3, 1940. See 60 S.Ct. 1098, 84 L.Ed. ___.

VINSON, Associate Justice.

These two cases are appeals, under § 205 (b) of the Sugar Act of 1937,¹ from a decision of the Secretary of Agriculture denying to appellants any allotment of the 1939 mainland cane sugar quota. The Act requires the Secretary annually to determine the amount of sugar needed to meet the requirements of consumers in the continental United States. § 201. It apportions this amount among domestic and foreign areas of supply. § 202. Once the quota for any area is filled, no more sugar from that source may be marketed in the United States during the quota period. § 209(a) (b). Under certain conditions, the Secretary is required to make allotments of any area's quota to persons who market or import sugar in the continental United States for consumption therein, § 205(a), and thereafter no such person may exceed his allotment. § 209(d). The basis for the determination of individual allotments is that they "shall be made in such manner and in such amounts as to provide a fair, efficient, and equitable distribution of such quota". § 205(a).

Under Title III, §§ 301-307, the area's quota is likewise allotted among farms, and benefit payments are made on condition that the farmer has not marketed in excess of the "proportionate share" for his farm. The only relevancy of this provision is that processings of sugar from these proportionate shares constitute one of the three factors that may be considered in allotting the marketing quota for manufactured sugar.

For the year 1939 the Secretary set a quota of 424,727 tons for the mainland cane sugar area (Louisiana and Florida), and this quota was allotted among 69 processors. Appellants were denied any participation in the allotment. The Act gives to any person whose application for an allotment has been denied a right to appeal to this court within twenty days. § 205(b). The decision sought here to be reviewed was made April 28, 1939, and notwithstanding the appeal was filed in time and prosecuted with vigor, the cause was not ready for hearing until about thirty days before the end of the year.

Appellants are Gay Union Corporation, Inc., and Canal Bank & Trust Company (in liquidation). Gay Union owns four sugar plantations located in Louisiana with a factory located on one of them. Although the factory has not operated since 1928, it is claimed that it has been "maintained intact". The factory allegedly has a twenty-four hour processing capacity of 800 tons of sugarcane and, in its application for an allotment, Gay Union stated that a survey made in 1938 indicated that about 30,000 to 35,000 tons of sugarcane were available for processing at their factory. Without an allotment it is claimed that the factory is valueless, on the theory that operations could not safely be commenced without assurance of a right to market the product.

Canal Bank likewise owns a plantation and a sugar factory located in Louisiana. No sugar has been processed since 1929, but Canal Bank claims that the factory has been "maintained intact" and "can be placed in operation on short notice and in good condition". The factory allegedly has a twenty-four hour processing capacity of 600 tons, and it is claimed that a canvass by disinterested parties in 1938 indicated that 45,000 to 50,000 tons of sugarcane (including plantation grown cane) were available for it. Canal Bank also claims that, without an allotment, its factory is worthless and that two opportunities to sell, for operation, one in 1937 and the other in 1938, were lost because of lack of assurance of an allotment. It should be noted that the allotment provisions were not invoked until 1939.

On January 18, 1939, pursuant to the provisions of § 205(a)² the Secretary found that allotment of the mainland cane sugar quota was necessary "to prevent disorderly marketing of such sugar and to afford all interested persons an equitable opportunity to market such sugar in the continental United States * * *".³ Public notice was given of a hearing on the subject of allotments to be held in Mobile, Alabama, on February 8, 1939. The meeting was largely attended by processors. Apparently the regulations do not require an applicant to file a petition asking for an allotment. Instead, the discussion, as we gather from the record, consists largely of suggestions how the quota shall be allotted. Witnesses are heard, and the matter is then considered and determined by the Secretary on the recommendation of his examiners.

In the present instance, the Sugar Division of the Department proposed that the basis of allotment should be past marketings of sugar and processing of sugarcane to which proportionate shares pertained, and that equal weight be given them. Several other allotment formulae were submitted at the hearing by the processors, including a proposal that processings from proportionate shares should be given three-fourths weight. After the hearing, the Secretary determined to give three-fourths weight to processings from proportionate shares and one-fourth weight to past marketings in order to protect producers of sugarcane. Processings were measured by the processings from proportionate shares of the 1938-39 crop, while past marketings were measured by specified averages of marketings during the four calendar years, XXXX-X-X-X. If appellants had been engaged in processing or in the marketing of sugar during the respective years they would have received an allotment. But since they were not engaged in either during any of the years mentioned they were excluded. In reaching the result announced, the Secretary expressly considered only two of the three factors contained in the Act, and omitted from express consideration the third, namely present ability to market. The appellants claim that if the Secretary had considered ability to market or past marketings prior to 1929, they would have received allotments. The view of the Secretary is that Congress intended these factors to be considered singly or in combination, as he in his discretion believed to be proper. On the other hand, appellants insist that Congress expressly provided in the Act that the Secretary was to use all three standards and that the result of the act of the Secretary was to deprive appellants of their property without due process of law in contravention of the Fifth Amendment of the Constitution, and also to create a monopoly in violation of the Sherman and Clayton Anti-trust Acts, 15 U.S.C.A. § 1 et seq.

The Government raises a preliminary issue, which we shall consider first. It is the contention that the case is moot. The ground of this is that on September 11, 1939, shortly after the outbreak of war in Europe, the President suspended the provisions of Title II of the Sugar Act,⁴ and that this had the effect of removing the restrictions on the marketing of sugar. The result, the Secretary says, was to grant appellants as great, if not greater relief than any which could possibly be granted by an order in this proceeding. Doubtless this is true so far as concerns any relief which this court can afford appellants with relation to an allotment for the year 1939. But while the case was under consideration by us, the President revoked his earlier suspension,⁵ and the Secretary has now reinstated his regulations governing notice and hearings to establish new allotments,⁶ and we take judicial notice of the fact that by an order dated January 13, 1940, he has fixed the 1940 quota, in substantially the same amount, for each area⁷ and individual allotments may follow. From this, it seems not unlikely that the order complained of may be replaced by another of substantially similar import and that appellants, in the current year, will find themselves in the same position as in the preceding year, since, in the very nature of things, it will be again impossible to secure a court review and obtain a decision before the end of the allotment period.

We are clear that this brings the case under the rule announced in Southern Pacific Terminal Co. v. Interstate Commerce Comm., 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310. There the Supreme Court said, in answer to the defense that the order appealed from had expired, that sometimes a different conclusive factor is shown. In that case it was held that expiration of the order of the Interstate Commerce Commission did not make the case moot. "The questions involved in the orders of the Interstate Commerce Commission are usually continuing (as are manifestly those in the case at bar), and these considerations ought not to be, as they might be, defeated, by short-terms orders, capable of repetition, yet evading review, and at one time the government, and at another time the carriers, have their rights determined by the Commission without a chance of redress."

In Boise City Irr. & L. Co. v. Clark, 131 F. 415, the Ninth Circuit Court of Appeals, on a similar state of facts, said a case was never moot in a situation in which there is the necessity of deciding a question of law to serve as a guide to the body called upon to act again in the same matter. And to the same effect, see United States v. Trans. M. O. Freight, 166 U.S. 290, 308, 17 S.Ct. 540, 41 L.Ed. 1007; and see also Federal Trade Com. v. Goodyear Tire & R. Co., 304 U.S. 257, 58 S.Ct. 863, 82 L.Ed. 1326, and Panama Ref. Co. v. Ryan,...