Richmond Hosiery Mills v. Camp

• Decision Date: 18 May 1934
• Docket Number: No. 758.,758.
• Parties: RICHMOND HOSIERY MILLS v. CAMP.
• Court: U.S. District Court — Northern District of Georgia

7 F. Supp. 139

RICHMOND HOSIERY MILLS v. CAMP.

No. 758.

District Court, N. D. Georgia.

May 18, 1934.

Sutherland, Tuttle & Brennan, of Atlanta, Ga., John A. Chambliss, of Chattanooga, Tenn., and J. Alton Hosch, of Gainesville, Ga., for plaintiff.

M. Neill Andrews, Asst. U. S. Atty., of Atlanta, Ga., and Curley C. Hoffpauir, Asst. Counsel, National Recovery Administration, of Washington, D. C., for defendant.

UNDERWOOD, District Judge.

Complainant, a manufacturer of hosiery, having plants located in Georgia and Tennessee and doing an interstate business, filed this bill against Lawrence S. Camp, United States Attorney, seeking to enjoin him from prosecuting complainant for violation of the National Hosiery Code, or otherwise attempting to enforce against it the provisions of the National Industrial Recovery Act (48 Stat. 195) "in so far as said Act or any code or regulation thereunder might impose a limitation or restriction in the operation of complainant's productive machinery." Complainant alleged that it, "along with other hosiery manufacturers, met in several sessions for the purpose of agreeing upon * * * a code of fair competition for the hosiery industry * * * in an effort to follow out the purposes of said Act"; that on July 12, 1933, a "preliminary draft of a basic code of fair competition for the hosiery industry was approved at a meeting of" the National Association of Hosiery Manufacturers, of which complainant was and is an active and influential member, "by the majority of the manufacturers assembled in conference"; that "the terms agreed upon were protested by the plaintiff as being unreasonable" and as restricting its "use of certain of its machinery by more than fifty per cent in hours, and consequently resulted in actually reducing the number of persons employed because the machinery, subject to the code provisions said to be applicable, would stand idle."

Subsequently, the National Association of Hosiery Manufacturers, claiming to represent 80 per cent. of the hosiery industry, submitted a proposed basic code of fair competition to the National Recovery Administration, which in turn arranged for a public hearing at which "an opportunity to be heard (either in person or by duly appointed representative either by appearance or by sending a written or telegraph statement)" was given "to all persons or groups who can show a substantial interest as workers, employers, consumers or otherwise in the effect of any provision of proposed code."

Notice of the time and place of said hearing was given to all concerned, including complainant. Hearings were duly held, at which complainant was represented by its president, who also presented complainant's contentions directly to President Roosevelt prior to his approval of the Code, and "the Administrator having rendered his report containing an analysis of the code of fair competition, together with his recommendations and findings, respectively, thereto, and the Administrator having found that the said code of fair competition complied in all respects with" the National Industrial Recovery Act, the President, on August 26, 1933, adopted and approved "the report, recommendations and findings of the Administrator" and ordered "that the said code of fair competition be and it is hereby approved."

Complainant avers that it fully complied with all the provisions of the Code until the 17th day of October 1933, and has since complied with all provisions, except section 6 of article 4; that it has since said date complied with all code provisions in all of its plants except the Rossville Mill and has complied with all of them at that mill with the exception that it has refused to comply with said section 6 in so far as it forbids the operation of complainant's knitting machines at Rossville more than two shifts a day, because to so limit their operation would necessitate the discharge of about twenty of the employees operating them, which would in turn displace approximately one hundred and fifty other employees engaged in subsequent operations, and would cause it great loss and be an unconstitutional invasion of its rights.

Said section 6 of article 4 of the Code is in the following language: "The productive operations of a plant shall not exceed two shifts of forty (40) hours each week. The work week for productive operations, except dyeing, shall not exceed five (5) days of eight (8) hours each. These days shall be Monday to Friday, inclusive, except in those states where the laws operate to prevent the operation of two forty (40) hours shifts within the mentioned five (5) days. In such states, the employer may operate one shift on Saturday, not to exceed four (4) hours, it being definitely understood that his total machine hours shall not exceed eighty (80) hours per week."

Complainant contends that section 3 of article 1 of the National Industrial Recovery Act (15 USCA § 703), authorizing the establishment of Codes of fair competition, and the above-quoted section 6 of article 4 of the Code, are unconstitutional if held applicable to it.

Since complainant attacks the constitutionality of the act itself, this question must be first determined, because an injunction should be granted as prayed if this contention is correct. Kennington v. Palmer, 255 U. S. 100, 41 S. Ct. 303, 65 L. Ed. 528.

The act by its own terms limits its application to transactions "in and affecting interstate or foreign commerce." 15 USCA § 703 (b). Congress' power is supreme in this field, so there can be no question of the constitutionality of the exertion of this power if done in a manner authorized by the Constitution.

It is claimed, however, that this undisputed power has been exerted unconstitutionally because Congress has attempted to delegate its legislative authority to the President and certain unofficial groups and provided a method of enforcement of the act which deprives complainant of its property without due process of law and has created a criminal offense without defining the crime with sufficient explicitness to inform those who are subject to the penalties imposed what conduct on their part will render them liable to such penalties.

Of course, it is settled that the legislative power of Congress cannot be delegated, but it is equally well settled that Congress may "declare its will, and, after fixing a primary standard, devolve upon administrative officers the `power to fill up the details' by prescribing administrative rules." United States v. Shreveport Grain & Elevator Co., 287 U. S. 77, 53 S. Ct. 42, 44, 77 L. Ed. 175; Home Bldg. & Loan Ass'n v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231, 78 L. Ed. 413, 88 A. L. R. 1481.

The National Industrial Recovery Act, in section 1 (15 USCA § 701), declares the existence of a national emergency, announces the legislative policy "to remove obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, to eliminate unfair competitive practices," etc., and, in section 2 (15 USCA § 702), authorizes the President, in order to effectuate this policy, to accept and utilize such voluntary and uncompensated services and to appoint such officers and employees as he may find necessary. Sections 3 and 7 of the act (15 USCA §§ 703, 707) authorize the President to approve codes of fair competition which meet the minimum express requirements specified therein (as in section 7), and which he finds "will tend to effectuate the policy" of the act as declared by Congress and are not designed to promote monopolies or to eliminate or oppress small enterprises or discriminate against them and to have been presented by truly representative groups. Provision is also made for a hearing, prior to approval by the President, of any Code, not only of those represented by associations or groups, but of all others interested.

It will be seen that the act provides for a hearing of all interested parties, findings of facts by the President, and approval and adoption by him of the Code based upon such findings before the Code becomes effective. When these conditions have been met, as they have been in this case, the Code becomes binding upon the industry and "any violation of any provision thereof in any transaction in or affecting interstate or foreign commerce shall be a misdemeanor." Section 3 (f) of title 1 of the act, 15 USCA § 703 (f).

The Code thus becomes effective upon the findings and authority of the President, as his act, and not by virtue of the acts of any other officer or group, though he may, as expressly authorized by the act, utilize such agents and agencies as he may deem necessary in making his investigations and in reaching his decision.

As stated in United States v. Grimaud, 220 U. S. 506, 517, 31 S. Ct. 480, 483, 55 L. Ed. 563: "It must be admitted that it is difficult to define the line which separates legislative power to make laws, from administrative authority to make regulations. * * * But when Congress had legislated and indicated its will, it could give to those who were to act under such general provisions `power to fill up the details' by the establishment of administrative rules and regulations, the violation of which could be punished by fine or imprisonment fixed by Congress."

The National Industrial Recovery Act may not have been drafted in full detail or with technical exactness, but "Regard must be had * * * where constitutional limits are invoked, not to mere matters of form, but to the substance of what is required." Crowell v. Benson, 285 U. S. 22, 53, 52 S. Ct. 285, 293, 76 L. Ed. 598.

One of the express purposes of the act is "to eliminate unfair competitive practices," and it is not shown that the...