Perkins v. Brown

• Decision Date: 15 November 1943
• Docket Number: No. 265.,265.
• Citation: 53 F. Supp. 176
• Parties: PERKINS v. BROWN, Adm'r of Office of Price Administration, et al.
• Court: U.S. District Court — Southern District of Georgia

53 F. Supp. 176

PERKINS v. BROWN, Adm'r of Office of Price Administration, et al.

No. 265.

District Court, S. D. Georgia, Savannah Division.

November 15, 1943.

Aaron Kravitch, of Savannah, Ga., for plaintiff.

Perry Brannen, of Savannah, Ga., and S. F. Memory, Jr., of Blackshear, Ga., for defendants.

LOVETT, District Judge.

Plaintiff, a retail gasoline dealer, having been ordered by the Office of Price Administration to suspend selling or dealing in gasoline for three months, has brought this suit to restrain enforcement of the order. He challenges the action of the OPA on the grounds, first, that it is arbitrary and capricious and without substantial evidence to support it, secondly, that the delegation by the President to the Office of Price Administration of the authority, power and discretion conferred upon him by certain Acts of Congress, which will be presently discussed, was invalid, third, that there is no statutory warrant for the granting of suspension orders by the Office of Price Administration for violations of the regulations and, fourth, that the Suspension Order and procedure prescribed by the OPA for its issuance are violative of Secs. 1 and 2 of Art. III of the Constitution, for that the action taken is punitive and involves a judicial function vested by the Constitution exclusively in the courts, and was not by Congress—and indeed could not be—delegated to the executive department or any or its administrative agencies.

The issues and facts are stipulated.

After due notice and a hearing before a "Hearing Commissioner" it was found by the agency that plaintiff had violated certain ration orders promulgated by it prescribing, in substance, that every dealer shall at all times have in his possession or control gasoline coupons having an aggregate gallonage value which, when added to the gasoline on hand, equals and does not exceed his storage capacity; and that the dealer may deliver gasoline to the consumer only in exchange for coupons bearing certain notations and endorsements and which at the time are valid. Ration Order 5C Secs. 1394.8217, 1394.8153, 1394.8152, 1394.7652. The suspension order was made under Sec. 1394.8302. See 7 F.R. 9135 et seq., 9787. A hearing was held under procedural regulation 4, Sec. 1300.151, et seq., 7 F.R. 4296 et seq. On appeal by the plaintiff to the "Hearing Administrator", set up by the regulations, the suspension order was affirmed. This has exhausted his administrative remedies,¹ sometimes referred to as a "rule of judicial administration". Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50, 51, 58 S.Ct. 459, 463, 82 L.Ed. 638.

The urge that the action of the hearing commissioner was without substantial evidence to justify his order and, therefore, was arbitrary, capricious and unreasonable may be quickly disposed of. The short answer is that plaintiff admitted on the hearing the violations charged against him. The only defense he then asserted was that his disregard of the ration orders was unintentional. There was sufficient evidence to make that claim issuable, and it is not within the province of this court to review the findings of the agency on such issues of facts. United States v. George S. Bush & Co., 310 U.S. 371, 380, 60 S.Ct. 944, 84 L.Ed. 1259; Railroad Commission v. Rowan & Nichols Oil Co., 310 U.S. 573, 580, 581, 60 S.Ct. 1021, 84 L.Ed. 1368; Houston v. St. Louis Independent Packing Co., 249 U.S. 479, 484, 39 S.Ct. 332, 63 L.Ed. 717; Farley v. Heininger, 70 App.D.C. 200, 105 F.2d 79, 81, 82, certiorari denied 308 U.S. 587, 60 S.Ct. 110, 84 L.Ed. 491.

The authority of the OPA to adopt the regulations in question and to issue suspension orders for violations stems from Secs. 2(a) (2) and 2(a) (8) of "an Act to expedite national defense, and for other purposes". Act of June 28, 1940, 54 Stat. 676, 41 U.S.C.A. note preceding Section 1, as amended by the Act of May 31, 1941, 55 Stat. 236, and by Title III of the "Second War Powers Act of 1942", 56 Stat. 176, 50 U.S.C.A.Appendix, § 631 et seq., § 633.

By the last mentioned Act: "Whenever the President is satisfied that the fulfillment of requirements for the defense of the United States will result in a shortage in the supply of any material or of any facilities for defense or for private account or for export, the President may allocate such material or facilities in such manner, upon such conditions and to such extent as he shall deem necessary or appropriate in the public interest and to promote the national defense". Sec. 2(a) (2), Title III.

The Act further provides: "The President may exercise any power, authority, or discretion conferred on him by this subsection (a), through such department, agency, or officer of the Government as he may direct and in conformity with any rules and regulations which he may prescribe". Sec. 2(a) (8).

By successive executive orders and directives the President has lodged in the Office of Price Administration, so far as material here, the power granted to him to allocate vital materials necessary in the war effort, such as gasoline, upon the conditions and to the extent deemed necessary.

With the power in the President to allocate such materials conceded—as plaintiff here concedes—in the light of express authority conferred upon him by Congress to delegate such power to any agency of government as he may direct, I am unable to see how there has been any unlawful delegation.

No one will deny that gasoline is vital to the successful prosecution of the war. If the supply and distribution are uncontrolled scarcity inevitably will result. Scarcity follows without control because of the ability and willingness of some groups to buy more than they need under a war time economy and their disposition to buy for future as well as for present use. The effects of uncontrolled scarcity would be serious indeed. In modern war, armed forces move only as fuel for transporting them is available. Indirectly, scarcity without control contributes to the inflationary spiral which price regulation, primarily at least, is designed to control. Accordingly, allocation, or rationing as it is more commonly called, has for its purpose the use of vital war materials in the manner most helpful to the war effort, the equitable distribution when scarcity exists in order that our complicated economy may be least dislocated and disturbed, and finally the prevention of inflation. Incidently, it results in reducing consumption to the end that man-power, plant capacity and raw materials may be the greater devoted to war production.

If, then, rationing is essential to the proper prosecution of the war effort, there can be no doubt of the power of Congress to enact the legislation here involved as an appropriate means to a permitted end under Art. 1, Sec. 8 of the Constitution, usually referred to as the war powers of Congress; and that the citizen may suffer some inconvenience or pecuniary loss constitutes no violation of the Due Process Clause of the Constitution. Amend. 5. It was for Congress to make the choice of the means by which its objective of winning the war was best to be secured. Virginian R. Co. v. System Federation, 300 U.S. 515, 553, 554, 57 S.Ct. 592, 81 L.Ed. 789; Hamilton v. Kentucky Distilleries Warehouse Co., 251 U.S. 146, 40 S.Ct. 106, 64 L.Ed. 194; Ruppert v. Caffey, 251 U.S. 264, 302, 40 S.Ct. 141, 64 L.Ed. 260.

There is no unconstitutional delegation of legislative power. Congress expressly authorized sub-delegation by the President. Opp Cotton Mills v. Administrator, 312 U. S. 126, 657, 61 S.Ct. 524, 85 L.Ed. 624; Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263; Mulford v. Smith, 307 U.S. 38, 59 S.Ct. 648, 83 L.Ed. 1092; Taylor v. Brown, Em. App., 137 F.2d 654; Brown v. Bernstein, D.C., 49 F.Supp. 728; Henderson v. Smith-Douglass Co., D.C., 44 F.Supp. 681; Henderson v. Bryan, D.C., 46 F.Supp. 682, 683 (10), 687; United States v. Randall, D. C., 50 F.Supp. 139. Apart from statutory authority for delegation to another by the named delegate such right may be implied because of the very necessities of the case. Williams v. United States, 42 U.S. 290, 1 How. 290, 11 L.Ed. 135; May v. United States, 8 Cir., 236 F. 495; United States v. Barono, D.C., 50 F.Supp. 520.

Whether a suspension order such as here involved is authorized by Section 2(a) (2) of the Act should be approached with recognition that legislation enacted during a national emergency and in time of war must be expressed in broad terms and generalities. As stated in Brown v. Bernstein, supra 49 F.Supp. 733, in "the interpretation of such legislation the court must not hunt for limitations nor scrutinize the wording with a confining intent but should seek for the purpose and spirit of the enactment".

Under the Act the President, through his delegate, is authorized to allocate shortage materials "in such manner upon such conditions and to such extent" as he shall deem necessary or appropriate in the public interest and to promote the national defense. It seems clear to me that a suspension order such as here involved is authorized by that section of the Act. If the rationing regulations had provided generally that vital materials such as gasoline should be distributed only by named employees of the government or that only those dealers who in the past had observed the rationing regulations were eligible for allocation of rationed commodities, there could be little doubt that such provision would be an exercise of the statutory power to allocate and to prescribe the conditions for allocation. Precisely the same effect is produced by a ration system which permits the receipt and transfer of commodities by all dealers, subject to subsequent elimination from eligibility of those found to have violated the rationing regulations. The suspension order is itself an allocation. Rationed commodities are allocated away from the violator for a period deemed reasonable under...