Jonco Aircraft Corp. v. Franklin

• Decision Date: 09 November 1953
• Docket Number: Civ. A. 5122.
• Citation: 114 F. Supp. 392
• Parties: JONCO AIRCRAFT CORP. v. FRANKLIN et al.
• Court: U.S. District Court — Northern District of Texas

114 F. Supp. 392

JONCO AIRCRAFT CORP. v. FRANKLIN et al.

Civ. A. 5122.

United States District Court N. D. Texas, Dallas Division.

June 14, 1953.

Judgment Reversed November 9, 1953.

Alto B. Cervin, Dallas, Tex., J. Rex Spurr, Shawnee, Okl., and John K. Pickens, Washington, D. C., for plaintiff.

Wallace C. Franklin Jr., Dallas, Tex., for defendants.

Before HUTCHESON, Chief Circuit Judge, ATWELL, Chief District Judge, and DAVIDSON, District Judge.

Judgment Reversed November 9, 1953. See 74 S.Ct. 126.

ATWELL, Chief Judge.

The plaintiff is a Delaware corporation with its principal office in Shawnee, Oklahoma. The defendants are citizens of Dallas, Texas. More than $3,000 are involved, exclusive of interest and costs.

The plaintiff seeks relief from a threatened hearing before the defendant on complaint filed by the Wage Stabilization Board, alleging that it is not in compliance with the orders and statutes of the United States. That a hearing by said Board, and the consequent penalties and punishments, for which the plaintiff has no legal remedy at law, make it imperative that such hearing be not held, and that a restraining order issue from this court.

After a careful analysis of the plaintiff's bill, the court concluded and called for the organizing of a three-judge court in accordance with the statute, and, thereupon, Senior United States Circuit Judge of the Fifth Circuit was notified, and regulation notices were given to the Attorney General of the United States.

Such three-judge court heard the complaint, the answer thereto, and the arguments and testimony thereon, on Thursday, June 11, 1953, and conclude that the temporary restraint should be made permanent.

The plaintiff is engaged in the manufacture of precision tools and parts for the aircraft industry, and its plant is in Shawnee, Oklahoma. It is the largest producer of its kind in the mid-west, operating under fifteen prime national defense contracts, which include a majority of principal manufacturers of military aircraft. In excess of 98% of its production is for the national defense.

The defendants assert the power, as shown under E.S.A. General Order No. 15, to disallow a prior and unauthorized alleged payroll of plaintiff as of November 24, 1952, in the amount of $111,000, in addition to a total payroll of $575,000 for the period August 29, 1952 to February 2, 1953.

The burden and injury, because of the deprivation of Internal Revenue tax requirements and other penalties, fines, and indictments, required plaintiff to seek court refuge. See Defense Production Act 1950, as amended, 66 Stat. 296, Title 50 U.S.C.A.Appendix, § 2061 et seq.; also, General Order No. 15. 17 Federal Register 2994. Treating of the disallowance of wage payments, even for the entire amount. That such determination "shall be final and not subject to review by the Tax Court of the United States, or, by any court in any civil proceeding. See also Bureau Internal Revenue ruling IT-4105, wherein it announces disallowance for tax purposes wage payments in amount certified to it by the economic stabilization agency. No provision is made for the review of such certifications by the Bureau of Internal Revenue."

The recital of the above is sufficient without going through the entire category, to show the seriousness of the penalties liable to be imposed upon the plaintiff.

The allegation is made that such Defense Production Act, as amended, is unconstitutional.

See such cases as United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477; Bailey v. Drexel Furniture Co., 295 U.S. 20, 42 S.Ct. 449, 66 L.Ed. 817; United States v. Constantine, 296 U.S. 287, 56 S.Ct. 223, 80 L.Ed. 233; Lilly v. Commissioner of Internal Revenue, 343 U.S. 90, 72 S.Ct. 497, 96 L.Ed. 769, and National Life Ins. Co. v. United States, 277 U.S. 508, 48 S. Ct. 591, 72 L.Ed. 968.

Upon such questions as the delegation of legislative power, there is a line of decisions which classes it unconstitutional. See Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160; Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446. There are no standards with which the President could be guided in determining the policy or wishes of Congress.

An order of the Board is subject to review by the designated court, and only when sustained by the court may the order be enforced. Upon that review all questions of the jurisdiction of the Board and the regularity of its proceedings, all questions of constitutional right or statutory authority, are open to examination by the court. N. L. R. B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45, 57 S.Ct. 615, 81 L.Ed. 893. See also Stark v. Wickard, 321 U.S. 288, 309, 64 S.Ct. 559, 83 L. Ed. 733; Social Security Board v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 90 L.Ed. 718; St. Joseph's Stockyards Co. v. United States, 298 U.S. 38, 73, 56 S.Ct. 720, 80 L.Ed. 1033. And these holdings support plaintiff's entrance here, and it is not obliged to pursue any so-called administrative remedy.

However, defendants contend that since the General Savings Statute, 1 U.S. C.A. § 109, saves the liability for illegal wage payments made during the life of the Act, therefore, perforce administrative enforcement continues. That statute is concerned only with the preservation of judicial proceedings and it never has been contended or held that such savings statute preserved administrative proceedings. U. S. v. Hark, D.C., 49 F.Supp. 95, reversed on other grounds, 320 U.S. 531, 64 S.Ct. 359, 88 L.Ed. 290, rehearing denied 321 U.S. 802, 64 S.Ct. 517, 88 L.Ed. 1089; Rodgers v. U. S., 6 Cir., 158 F.2d 835 reversed on other grounds, 332 U.S. 371, 68 S.Ct. 5, 92 L.Ed. 3.

It is also contended, and the contention seems to be correct, that the National Enforcement Commission has not been continued in existence by any executive order after April 30, 1953. The complaint against the plaintiff was issued on April 1, 1953 by the Board which acted through defendant Franklin, and who still purports to act. However, there has been no Wage Stabilization Board since December, 1952, when its members resigned.

Quite recent decisions in this field may be found in Woodworth Co. v. Kavanagh, D.C., 102 F.Supp. 9, affirmed 6 Cir., 202 F. 2d 154. Also, in Aircraft & Diesel Equipment Corporation v. Hirsch, 331 U.S. 752, 67 S.Ct. 1493, 1503, 91 L.Ed. 1796, Mr....