Mattox v. United States, 12558.

• Decision Date: 15 February 1951
• Docket Number: No. 12558.,12558.
• Citation: 187 F.2d 406
• Parties: MATTOX et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

187 F.2d 406 (1951)

MATTOX et al. v. UNITED STATES.

No. 12558.

United States Court of Appeals Ninth Circuit.

February 15, 1951.

Reed M. Clarke, San Francisco, Cal., for appellant Mattox.

Ed Dupree, Gen. Counsel, Leon J. Libeu, Asst. Gen. Counsel, Francis X. Riley, Sp. Litigation Atty., Office of Housing Expediter, Washington, D. C., for appellant United States.

Before STEPHENS, HEALY, and BONE, Circuit Judges.

HEALY, Circuit Judge.

This is a suit by the United States for an injunction and restitution and for treble damages under § 205 of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A. Appendix, § 1895. It was filed May 9, 1949, and with the court's permission an amended complaint was filed September 6 thereafter. Upon trial the court found that the defendants had demanded and received from tenants amounts in the total sum of $6,761.80 in excess of the legal maximum rents. It granted an injunction and decreed restitution to tenants of the excess rentals collected, but did not award judgment for damages, single or treble, as prayed by the United States.

Both parties appealed. The defendants failed to present a brief in support of their appeal as required by our rules, and did not participate in the oral argument, but they have since filed a belated brief setting out their contentions. We have examined it and are of opinion that none of the several points argued has merit sufficient to justify discussion.

The cross-appeal of the United States challenges the court's failure to award damages, single or treble, for the whole or any part of the period falling within the one year statute of limitations. The government contends (1) that allowance of damages is mandatory under § 205 as amended April 1, 1949, and that recovery should have been allowed at least as to overcharges which occurred subsequent to that date; (2) that the 1949 amendment retroactively permits the United States to recover damages in the amount (or treble the amount) of the overcharges occurring prior to the effective date of the amendment and within the one year limitation period where, as here, the tenant fails to institute action; and (3) that the court was in error in finding that the violations committed by the defendants were neither willful nor the result of failure on their part to take practicable precautions.

A glance at the statutory history will be helpful. During the period beginning July 1, 1947, the effective date of the Housing and Rent Act of 1947, through March 31, 1949, it was exclusively the right of the tenant to sue under § 205 for damages for rent overcharges. The Expediter was limited to actions for injunction and restitution as his sole means of enforcing compliance. The amendment of April 1, 1949, restored the right of the United States to sue for damages. The relevant portions of § 205, as it has since existed, are shown on the margin.¹

From the early years of rent control this court, and the courts generally, have held that the district court upon a finding of violation must grant a judgment in damages in an amount at least equal to the amount of the overcharges. In Fontes v. Porter, 9 Cir., 156 F.2d 956, 958, we said: "Lack of willfullness, coupled with the taking of practicable precautions against the occurrence of a violation, operates only to reduce damages to the amount of the overcharge." Consult also Woods v. Haydell, 5 Cir., 178 F.2d 914, 915. This mandatory principle is in nowise affected by a grant of restitution to the tenant. Restitution is an equitable remedy resorted to under § 206(b), independently of the award of damages. Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332; Woods v. Richman, 9 Cir., 174 F.2d 614, 616.² Accordingly we are of opinion that the trial court erred in denying damages at least in the amount of the overcharges.

Two of the circuits have now held that the 1949 amendment, restoring to the United States the right to damages, is retroactive. United States v. Gianoulis, 3 Cir., 183 F.2d 378, 380; Miller v. United States, 5 Cir., 186 F.2d 937. In the first of these cases the court observed that prior to the 1949 amendment the tenant had a right of action to recover...