Pacific Coast Meat Job. Ass'n, Inc. v. Cost of Living Coun.

• Decision Date: 18 August 1973
• Docket Number: No. 9-7.,9-7.
• Citation: 481 F.2d 1388
• Parties: PACIFIC COAST MEAT JOBBERS ASSOCIATION, INC., et al., Plaintiffs-Appellants, v. The COST OF LIVING COUNCIL, Defendant-Appellee.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

481 F.2d 1388 (1973)

PACIFIC COAST MEAT JOBBERS ASSOCIATION, INC., et al., Plaintiffs-Appellants, v. The COST OF LIVING COUNCIL, Defendant-Appellee.

No. 9-7.

Temporary Emergency Court of Appeals.

August 18, 1973.

Andrew H. Field, San Francisco, Cal. (Barry D. Hovis, Victor P. Bonfilio, Jr., San Francisco, Cal., with him on the brief), Angell, Adams & Holmes, San Francisco, Cal., for plaintiffs-appellants.

John N. Hanson, Atty., Dept. of Justice, Washington, D. C. (Irving Jaffe, Acting Asst. Atty. Gen., William E. Nelson, Stanley D. Rose, Robert Eliot Easton, Sr., Attys., Dept. of Justice, with him on the brief), for defendant-appellee.

Before CARTER, CHRISTENSEN and ESTES, Judges.

ESTES, Judge.

This is an appeal under Section 211 of the Economic Stabilization Act of 1970, as amended, by plaintiffs, Pacific Coast Meat Jobbers Association, Inc., National Association of Meat Purveyors, Inc., and their members,¹ from an order of the United States District Court for the Northern District of California, denying plaintiffs a preliminary injunction against the Cost of Living Council (C. L.C.) restraining the enforcement of the C.L.C.'s temporary meat price ceiling regulations against any of the parties to this litigation.²

There is also before us an original application for a preliminary injunction on the same grounds as presented in the trial court. By stipulation of the parties, which will be filed nunc pro tunc, in the court below, it was agreed that if this court denied the motion for a preliminary injunction, the motion of the C.L.C. to dismiss the complaint should also be granted. An appropriate order will be filed nunc pro tunc in the court below. It was further agreed that the notice of appeal heretofore filed from the decision below would include a review of the decision dismissing the complaint. Counsel for the plaintiffs expressly acknowledged that by this stipulation he was agreeing that no question of the failure of the complaint to state a cause of action was presented below.

On March 29, 1973, the C.L.C. issued Subpart M of its Regulations as "Temporary Meat Price Ceilings," which established ceilings on the prices which could be charged or paid for most meat.

On June 13, 1973, the President issued Executive Order 11723 providing for a comprehensive freeze for a period of 60 days on the prices of all commodities and services offered for sale except the prices for raw agricultural products.

On June 15, the C.L.C. issued "Freeze Regulations" (6 C.F.R. Part 140) to implement Executive Order No. 11723.

On July 19, 1973, the C.L.C. issued its Special Price Rules for Food effective from July 18 to September 12, 1973 (6 C.F.R. 140.91-140.99). These Special Rules and Amendments, among other things, lifted the ceiling on prices charged or paid for most meat, except beef. Under the amendments, it is permissible to charge or pay a price for any meat item derived from swine or sheep above the ceiling price for that item so long as that increased price does not exceed an allowable amount calculated pursuant to the amended regulations. 6 C.F.R. 130.121, 130.127, 130.57D(e) Only one of the plaintiffs sought an administrative exception from the price ceilings (under Sec. 207(b) of the Act or C.L.C. Freeze Regulations, Subpart H). The exception has not been acted upon. On July 27, 1973, the plaintiffs commenced this action seeking to enjoin enforcement of these regulations by the C.L.C.

Plaintiffs challenged the C.L.C.'s actions as being arbitrary and capricious and in excess of its authority. They also attack its failure to hold formal hearings in accordance with Sec. 207(c) of the Act, and its failure to make adequate findings and allege that such findings as it did make were not supported by substantial evidence. In addition, plaintiffs charge the C.L.C. with allowing the price ceiling on beef to continue in effect after its alleged effects became apparent without holding further hearings and making modifications thereof. Finally, the C.L.C. actions were alleged to be contrary to the statutory requirements of Sections 203(b)(1), (2) and (5).³

The burden which must be borne by the plaintiff in order to obtain preliminary relief is not a light one:

"The standards which should guide the decision to grant a preliminary injunction have been often stated. The movant must show a substantial likelihood of success on the merits, and that irreparable harm would flow from the denial of an injunction. In addition, the trial judge must consider the inconvenience that an injunction would cause the opposing party, and must weigh the public interest as well." McGuire Shaft & Tunnel Corp. v. Local U. No. 1791, U.M.W., 475 F. 2d 1209, at 1216 (T.E.C.A.1973), cert. den., ___ U.S. ___, 93 S.Ct. 3008, 37 L.Ed.2d 1009 (6/18/73).

Accord see Pauls v. Secretary of Air Force, 457 F.2d 294, 298 (1 Cir. 1972); Unicon Management Corp. v. Koppers Co., 366 F.2d 199 (2 Cir. 1966); Virginia Petroleum Jobbers Ass'n v. F.P.C., 104 U.S.App.D.C. 106, 259 F.2d 921 (D. C.Cir. 1958); Hamlin Testing Labs, Inc. v. A. E. C., 337 F.2d 221 (6 Cir. 1964); Associated Securities Corp. v. S.E.C., 283 F.2d 773 (10 Cir. 1960).

It is clear that plaintiffs have not made the showing necessary to entitle them to a preliminary injunction. There is ample evidence in the record to support the District Court's decision that the public interest would be impaired by the granting of relief, that appellants have failed to show arbitrary and capricious action by the C.L.C., and that the C.L.C. action was not beyond its legal authority.

For several reasons, it was entirely reasonable for the C.L.C. to decide to keep the ceiling on beef prices longer than on other meats. There was evidence to show that beef prices were rising faster than other meat prices, and that live poultry, sheep, and swine were being destroyed, while beef was only being withheld from the market. The affidavit of Dr. John T. Dunlop, Director of C.L.C., reveals that this problem was studied thoroughly and a decision reached on the basis of extrapolations from the best data available to the C.L. C.⁴

This decision is supported by substantial evidence in the record such that we cannot say that the C.L.C. was acting in an arbitrary or capricious manner, or that the decision of the District Court was erroneous. Also, since the President and those to whom he delegates this power are specifically given by the Economic Stabilization Act the power to institute price controls, and the regulations involved here were enacted in furtherance of the statutory goals of fighting inflation and stabilizing the economy, plaintiffs have failed to show that the C.L.C. actions were illegal. Thus it seems clear that plaintiffs were unable to show a substantial likelihood of success on the merits of the suit that would have entitled them to preliminary relief.

While there was testimony in the record to show that plaintiffs are experiencing financial losses from the beef price freeze, it is not clear that the harm will be irreparable. The freeze will end on September 12, 1973, and individual members of plaintiff organizations may avail themselves of the C.L.C. exemption procedures where unnecessary hardships are being experienced.⁵ And no showing has been made that the public interest would not be impaired by the inflationary price increases which would occur that much sooner if the freeze regulations continuing the price ceiling were enjoined.

In regard to the failure of the C.L.C. to hold public hearings, § 207(c) of the Act provides that "to the maximum extent possible," but not in every case, such hearings be held.⁶ In this case the record does not reveal improvident action, but rather a well-considered step that was reached after extensive consultations, albeit informal ones, with interested groups and individuals, including some members of plaintiff organizations. Obviously, in the emergency presented to the Council, formal hearings in advance of the announcements of the actions of C.L.C. would have been counter-productive, would have aggravated the situation, and there was no necessity for any subsequent hearing to justify continuation.

Plaintiffs argue further that the C.L.C. actions being challenged were contrary to §§ 203(b)(1), (2), and (5) of the Act, which generally require the C.L.C. to act fairly and equitably and prevent hardships, market disruptions, and shortages. They allege that since disruptions and shortages are obviously occurring, the C.L.C. must be found to have...