Lewis v. Anderson

• Decision Date: 09 June 1947
• Docket Number: No. 6932.,6932.
• Citation: 72 F. Supp. 119
• Parties: LEWIS et al. v. ANDERSON, Secretary of Agriculture, et al.
• Court: U.S. District Court — Southern District of California

72 F. Supp. 119

LEWIS et al. v. ANDERSON, Secretary of Agriculture, et al.

No. 6932.

District Court, S. D. California, Central Division.

June 9, 1947.

Sheppard, Mullin, Richter & Balthis, Frank S. Balthis, Jr., and Gordon F. Hampton, all of Los Angeles, Cal., and Thompson & Colegate, and H. L. Thompson, all of Riverside, Cal., for plaintiffs.

George H. Layman, David S. Korn, and J. J. Schalet, all of Washington, D. C., and Arthur Lasher, of Los Angeles, Cal., for defendants.

YANKWICH, District Judge.

Wars have never actually terminated on the day "cease-fire" orders were given. Many of them continued for decades, not so much in the form of actual fighting, but in the disruption and dislocation which they caused in the life of the nations involved. These facts, which are truisms to any student of history, apply especially to modern warfare, as exemplified by the last war. The destruction and the dislocation of the economic life of both the victor and the vanquished continue and will continue for years after the actual hostilities with Germany and Japan ended. And so those who are in charge of regulating and controlling the economic life of the nations involved in war have the difficult problem of determining when the various controls should come to an end. Wishful and unrealistic thinking call for immediate cessation of all governmental interference with economic life. Prudent statesmanship, economic or other, realizes the danger of immediate decontrol. The persons who are loudest in demanding the immediate return to free economy complain most vociferously about "sudden" decontrol. Rightly. For economic life cannot stand "sudden shocks". Adjustment from war to peace-time economy, if it is to be helpful, must be gradual.

The failure to understand these fundamental economic principles is responsible for many of the contentions which are now made before the courts. Some litigants wish us to adopt the view that, regardless of what the Congress does, the actual cessation of war actually entitles businesses or activities under control to be relieved from it.

The case before us is, in the main, grounded upon similar conceptions.

It assumes that, because control of commodities has ended and the Congress in the First Decontrol Act of 1947, Public Law 29, 80th Congress, Chapter 29, 1st Session, S. 931, 50 U.S.C.A.Appendix, §§ 633 note, 645, has declared that "emergency controls and war powers should not be exercised by the grant of broad, general war powers but should be granted by restrictive, specific legislation", even as to those commodities, such as sugar, as to which control has continued, courts should adopt a narrow interpretation of the powers granted.

In the particular case, plaintiffs would have us hold that, despite the fact that the Sugar Control Extension Act of 1947, Public Law 30, 80th Congress, Chapter 30, 1st Session, H. J. Res. 146, 50 U.S.C.A.Appendix, §§ 981-985, has continued control of sugar and has continued with respect to it all the emergency laws, that the administrative powers, which are the core of any control, are at an end. The answer to the chief contention made in this respect is contained in Fleming v. Mohawk Wrecking & Lumber Company, etc., 67 S.Ct. 1129, 1132, and in which Mr. Justice Douglas wrote for the Court: "On December 31, 1946, after the creation of the Office of Temporary Controls, the President, while recognizing that `a state of war still exists,' by proclamation declared that hostilities had terminated. The cessation of hostilities does not necessarily end the war power. It was stated in Hamilton v. Kentucky Distilleries & W. Co., 251 U.S. 146, 161, 40 S.Ct. 106, 110, 64 L.Ed. 194, that the war power includes the power `to remedy the evils which have arisen from its rise and progress' and continues during that emergency. Stewart v. Kahn, 11 Wall. 493, 507, 20 L.Ed. 176. Whatever may be the reach of that power, it is plainly adequate to deal with problems of law enforcement which arise during the period of hostilities but do not cease with them." (Emphasis added.)

The Circuit Court of Appeals for the Ninth Circuit in Fippin et al. v. United

States, 162 F.2d 128, said: "They contend that the Order (VHP-1) issued by the Administrator is an attempt to exercise the war powers of the Federal Government and since hostilities have ceased any use of the war powers to control a peace time emergency is unconstitutional and void. To bolster this argument they cite the opinion of Justice Holmes in Chastleton Corp. v. Sinclair, 264 U.S. 543, 547, 44 S.Ct. 405, 406, 68 L.Ed. 841, where he said: `A law depending upon the existence of an emergency or other certain state of facts to uphold it may cease to operate if the emergency ceases * * *' Assuming without deciding that the powers asserted in VHP-1 are `war powers', the argument of appellants fails in that, although the hostilities have terminated the emergency upon which the First and Second War Powers Acts depend still exists. Fleming v. Mohawk Wrecking Lumber Co., 67 S.Ct. 1129. It follows, therefore, consistent with the views of Justice Holmes, that the `war powers' could be and properly were exercised in and through the Order (VHP-1) by the Civilian Production Administration."

So we have two very recent declarations by our highest courts which hold definitely that the President's proclamation of cessation of hostilities did not necessarily end the exercise of war powers, unless a specific Congressional Act declared that there should be such cessation upon the making of the proclamation or thereafter terminated them. And so the problem presented in this case is very simple.

Regardless of what theorizing we may do, the exercise of war powers conferred by special Acts of the Congress, do not terminate unless a statute says so. Administrative agencies charged with exercising control may continue to exercise the same broad powers they exercised before, unless specifically forbidden by the Congress. And no court can, on the basis of generalities, determine that the present necessities call for more restricted exercise of the powers.

The Complaint in this case was filed on May 2, 1947. It contained many allegations of the type we have just referred to. The existence of the power to continue control of sugar and the constitutionality of even the specific Act of the Congress to continue control were both challenged. In view of what has been said, these need not detain us at all. For the contentions are, as I stated at the trial, without merit. See my opinion in Gray v. Commodity Credit Corporation, D. C. Cal. 1945, 63 F.Supp. 386, affirmed in Gray v. Commodity Credit Corporation, 9 Cir., 1947, 159 F.2d 243.

Only one question is really involved. And that is, whether the Sugar Control Act of 1947 continues the power to suspend for violation of allocation, orders of sugar.

But first, to a brief recital of the facts in the case.

The plaintiffs are engaged in the grocery business in Riverside, Riverside County, California. They have an old business, which was established by the father of Paul A. Lewis. Of the two stores operated by them, the main store is, perhaps, the largest of its kind in Riverside, doing a business of a quarter million dollars per month. Because of their long operation, they have contracts for delivery of groceries, including sugar, to some public institutions, such as hotels, restaurants, hospitals, the County Jail and the County Detention Home. During the rationing period from April 28, 1942, to September 1, 1946, the two stores sold 2,518,937 pounds of sugar. Upon investigation, it was discovered that they had overdrawn their ration bank account as of September 4, 1946, to the extent of 91,476 pounds. An administrative hearing was had, which resulted in an order being made on November 25, 1946, suspending the allocation for a period of 45 days. An appeal was taken from the order and the hearing Administrator, on April 28, 1947, affirmed the order and made it permanent. Under the provisions of the 1944 Amendment of the Second War Powers Act, 50 U.S.C.A.Appendix, § 633, which gave the District Courts exclusive jurisdiction to enjoin or set aside in whole or in part an order of suspension, this action was instituted on May 2, 1947. At the hearing on the Order to Show Cause why a Temporary Injunction should not issue, on May 26, 1947, I suggested that, in view of the urgency of the matter, the cause be tried forthwith on its merits. Counsel for both sides agreed and the cause was tried on the days to follow. I have before me for decision both the request for injunction and the decision of the cause on the merits.

What I have already said leaves but one question to determine — whether the Sugar Control Act of 1947 did away with the power of suspension. The contention that this is the case is grounded chiefly upon the provision of Section 1(a) (2) of the Act, which reads:

"(2) no person shall be subject to any criminal penalty or civil liability, under any provision of law referred to above, on account of any act or omission which is made unlawful by Section 4 of this Act".

This section must be read in conjunction with the Preamble which specifically provides that "notwithstanding any other provisions of law" the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 901 et seq., the Stabilization Act of 1942, 50 U.S.C.A.Appendix, § 961 et seq., the Second War Powers Act of 1942, 50 U.S.C.A.Appendix, § 631 et seq., and other Acts specifically mentioned, shall continue in effect with respect to sugar to and including October 31, 1947.

The Supreme Court in Steuart & Bros. v. Bowles, 1944, 322 U.S. 398, 64 S.Ct. 1097, 1100, 88 L.Ed. 1350, has held specifically that these statutes give the power to "allocate commodities" and to suspend allocations to persons found guilty of violating the regulations. And the language there used by Mr. Justice Douglas applies to the power sought to be exercised in this...