Martini v. Porter

• Decision Date: 25 September 1946
• Docket Number: No. 11082.,11082.
• Citation: 157 F.2d 35
• Parties: MARTINI et al. v. PORTER, Price Administrator.
• Court: U.S. Court of Appeals — Ninth Circuit

157 F.2d 35 (1946)

MARTINI et al. v. PORTER, Price Administrator.

No. 11082.

Circuit Court of Appeals, Ninth Circuit.

July 18, 1946.

Rehearing Denied September 25, 1946.

Theodore Tamba, of San Francisco, Cal., for appellants.

George Moncharsh, Deputy Adm'r for Enforcement, Milton Klein, Director, Litigation Division, David London, Chief, Appellate Branch, and Samuel Rosenwein, Atty., OPA., all of Washington, D. C., and Herbert H. Bent, Regional Litigation Attorney, OPA., of San Francisco, Cal., for appellee.

Before GARRECHT, DENMAN, and BONE, Circuit Judges.

BONE, Circuit Judge.

This is an appeal from a judgment awarding treble damages against appellants in an action instituted by the Price Administrator in the district court pursuant to Section 205(e) of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 925(e), hereinafter referred to as the Act.¹

In its complaint, plaintiff charged that appellants, and others, sold 3,782 cases of Dunbar's Canadian Whiskey in excess of the maximum prices established by the General Maximum Price Regulation, 7 F.R. 3153, as amended; that none of the purchases was made for use or consumption other than in the course of trade or business, and prayed for treble damages. At the trial it appeared that appellants had purchased two carloads of cases of liquor in question, (less about 300 cases) from one of the original defendants, Murray A. Schutz for $35.72 a case, including all taxes. Acting as manager of appellants' two liquor stores, Denny Martini, on his own initiative or through agents, sold quantities of the liquor to certain taverns, liquor stores, markets, and similar purchasers at prices of $57.50 or $62.50 per case. It was for making these sales (at wholesale) at $57.50 or $62.50 per case instead of $37.61 per case, the price fixed under the order set forth in footnote 5, for which the trial court assessed treble damages.

The principal issue in this case involves the validity of a certain order (footnote 5) issued by the Regional Administrator during the course of the trial (June 24, 1944) purporting to establish appellants' maximum prices for wholesale and retail sales made prior to August 31, 1943. A brief discussion of the statute and regulations is necessary to present a clear picture of the case.

The sales herein were made during July and August, 1943. The General Maximum Price Regulation controls these sales. There are four sections under the G.M.P.R. providing methods for ascertaining maximum prices. The first, Section 1499.2(a), fixes prices at the highest price charged by the seller during March, 1942 for the same or similar commodities. The second, Section 1499.2(b), provides that if the seller made no such sales during March, 1942 then his maximum prices are those charged during March, 1942, by his most closely competitive seller for the same or similar commodities. The third, Section 1499.3(a), if the prior methods are unavailable, gives the seller a formula based on his maximum prices for his most comparable commodities delivered during March, 1942, provided he sold the comparable commodities at the same distributive level in March, 1942.

From the evidence, however, it clearly appeared that these first three pricing methods could not apply to appellants because they had not sold this liquor, nor a similar commodity, during March, 1942; nor had their competitors; nor had the appellants sold at wholesale during March, 1942. Therefore, the only pricing method that could lawfully be employed by appellants was the fourth pricing method (Section 1499.3(c)). This Section provides in general that "the maximum price shall be a price determined by the seller after specific authorization from the Office of Price Administration or any duly authorized officer thereof."² It was binding on appellants who came squarely within its terms.

Although Denny Martini testified that he telephoned the OPA concerning a ceiling price on this liquor, the trial court specifically found that Martini did not apply for a price ceiling, nor did the OPA at any time authorize appellants to sell the liquor at any price.³ It is clear that 1499.3(c) is as much a "regulation prescribing a maximum price" as are the other three sections above described. To hold otherwise would invalidate a regulation, a power we lack. It is also true that appellants elected to wholly disregard its requirements.

The trial court confronted the question of whether, under the law and regulations, the order of June 24, 1944, issued by the Regional Administrator during the course of the trial, was a valid order, and whether it was proper to admit the order in evidence. Appellee maintains that the issuance of the order was clearly authorized under the broad terms of the Act and that issuing such an order was the only way in which the Administrator could sue for damages in this case. Otherwise the court would have no way of determining the amount of the damages flowing from sales made without any attempt whatever to conform to the requirements of 1499.3(c).

If this view be illogical we must consider a contrary view which might lead to the conclusion that appellants could lawfully ignore or defy the regulation in question and thereafter, when sued, as here, successfully defend the suit and retain the profits directly flowing from this act of defiance or indifference.⁴

If this court follows appellee's argument, the appellants would be in no different position than one who had secured a special price authorization (under 1499.3(c)) and thereafter sold his commodity at prices exceeding those so authorized. However, this brings us face to face with the material question of whether the order of June 24, 1944 is one authorized by law. If it is not the judgment may not stand.

The order itself is not phrased skillfully.⁵ It names appellants as applicants when clearly they did not apply for the order. The fact that it is to have a retroactive, or nunc pro tunc effect is expressed clearly enough in the language of the order. We believe that it must be read in the light of all of the surrounding facts. Both parties hereto view it as retroactive in effect. Appellee insists that it is meant to prescribe maximum prices for appellants' sales made prior to August 31, 1943 which sales could not be lawful unless and until made pursuant to an order of this general character authorizing a price (under 1499.3(c)).

The form of the order may be open to criticism because it does not "prescribe a method of determining a maximum price." In form it sets a dollars-and-cents ceiling price on the whiskey, but on the face of the accompanying statement, it is clearly made to appear that this price results from the use of the price formula (or "method") set forth in M.P.R. No. 445. Under the circumstances, we believe this to be sufficient.

The Administrator had knowledge of the sales and the character of the liquor, and these factors were relied upon to justify application of the price formula taken from M.P.R. No. 445, which prescribed certain maximum price levels. The administrator here undertook to apply this formula to the prices fixed in his order herein. In view of the fact that the appellants' unsanctioned sales had to be viewed, considered and handled retrospectively, it would have been useless at the time of trial (or after all of the unsanctioned sales had been made), to go through the whole procedure prescribed by section 1499.3(c). By flouting the regulations, appellants had made it impossible for this prescribed procedure to have been applied with a prospective effect to the liquor sales here involved.

Appellants do not appear to have been injured by the form of the order. They have at no time challenged the correctness of the dollars-and-cents price resulting from the application of the formula (method) to the facts, and, therefore, we do not here review the accuracy of the calculation made and applied by the Administrator and apparently adopted by the court.

Appellants have not asserted that they were denied the opportunity to attack the Administrator's application of this formula (method) to the facts, although they have attacked the order on many other grounds.

If the language employed in the order had been narrowed to a degree where it prescribed only a "method" which should be employed for calculating and establishing a maximum price for the liquor in question rather than the dollars-and-cents form of order used, a dispute might legitimately have arisen in the trial over the accuracy of the price calculations resulting from the application of the "formula." But no such contention is made. Because we cannot condemn the retroactive character of the order we must regard it as a mere (and proper) adjunct to 1499.3(c). It is no more vulnerable to attack than a normal, prospective order issued under the provisions of the regulation.

Appellee's counsel argue that the Administrator had authority to issue this order and submit it in evidence at the trial under the powers given him by § 201(d) of the Act, 50 U.S.C.A.Appendix, § 921(d), and in vindication of his right to sue under § 205(e). See also the broad powers vested in the Administrator by §§ 2(a), 2(c), 2(d), 2(g), and 202(a), 50 U.S.C.A.Appendix, §§ 902(a, c, d, g), 922. Whether or not this court has any jurisdiction to determine from the Act the Administrator's authority to issue a regulation or order in a particular case, the order here in question seems clearly authorized under the Act. If the Administrator has the right to sue under § 205(e) for a violation of § 1499.3(c) of the G.M.P.R., the authority to issue the order in question must be implied, otherwise his authority to sue for damages for price infractions would be utterly meaningless. Furthermore, specific authority is found in § 201(d). This section appears under Title II of the Act which is headed "Administration and Enforcement" and the section provides: "The Administrator may, from time to...