Riverview Packing Co. v. Reconstruction Finance Corp.

• Decision Date: 29 September 1953
• Docket Number: No. 570.,570.
• Citation: 207 F.2d 415
• Parties: RIVERVIEW PACKING CO., Inc. v. RECONSTRUCTION FINANCE CORP.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

207 F.2d 415 (1953)

RIVERVIEW PACKING CO., Inc. v. RECONSTRUCTION FINANCE CORP.

No. 570.

United States Emergency Court of Appeals.

Heard at New York City, December 8, 1952.

Decided September 29, 1953.

Rehearing Denied October 20, 1953.

Thurman Arnold and Milton V. Freeman, Washington, D. C., with whom Charles S. Gaines, Newark, N. J., Herman A. Greenberg, Richard A. Frank, Washington, D. C., Thomas J. Brogan, Jersey City, and Arnold, Fortas & Porter, Washington, D. C., were on the brief, for complainant.

George Arthur Fruit, Attorney, Washington, D. C., with whom Holmes Baldridge, Asst. Atty. Gen., and Marvin C. Taylor, Atty., Department of Justice, Washington, D. C., were on the brief, for respondent.

Before MARIS, Chief Judge, and MAGRUDER and McALLISTER, Judges.

MARIS, Chief Judge.

The complaint in this action filed under section 204(a) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 924 (a), seeks a judgment setting aside (a) the action of the respondent in invalidating and refusing to pay the complainant's meat subsidy claims for the months of April, May and June, 1944, June, July, August, September, October, November and December, 1945, and April, May, June, September and October, 1946, aggregating $368,548.64, (b) the provisions of Revised Livestock Slaughter Payments Regulation No. 3 of Defense Supplies Corporation¹ as applied to the facts of the case and (c) Directive 41 of the Office of Economic Stabilization as applied to the facts of the case. Complainant had filed a protest with the respondent under section 203(a) of the Emergency Price Control Act, as amended, 50 U.S.C.A.Appendix, § 923(a), and its protest had been denied. The protest was directed only against respondent's invalidation of and refusal to pay the subsidy claims in question. It set forth no objections whatever to either Revised Regulation No. 3 or Directive 41. Under the express terms of Section 204 (a) of the Emergency Price Control Act this court in a suit under that section may not consider an objection to a regulation or order unless it has been set forth in the complainant's protest.² Accordingly we are without power to consider the complainant's present contentions with respect to the alleged invalidity of Revised Regulation No. 3 and Directive 41. Moreover since Directive 41 was not issued under section 2 of the Emergency Price Control Act, 50 U.S. C.A.Appendix, § 902, but rather under the Stabilization Act of 1942, 50 U.S. C.A.Appendix, § 961 et seq., it is not subject to the protest and review procedure of the former act.³ It would, therefore, not be within the competence of this court to determine the validity of that directive even if objections to it had been included in the complainant's protest. We accordingly confine our consideration to the complainant's contentions with respect to the respondent's invalidation of and refusal to pay the subsidy claims in controversy.

The respondent's letter order of June 25, 1951, denying the complainant's protest indicates that its action with respect to the complainant's subsidy claims was taken on two grounds. The first ground was that the complainant had failed to keep and present accurate records in support of its claims, that its available records failed to support its claims and that its subsidy claims were not an accurate reflection of its slaughtering operations. This first ground of invalidation applied to all the claims filed for the period beginning January 1, 1944 and ending December 29, 1945. With respect to the claims for the period January 20, 1944 to November 3, 1944 the respondent asserted a second ground of invalidation. This was that they were invalid because of the complainant's wilful violation of the set-aside requirements of War Food Order No. 75 during that period as determined by the Department of Agriculture under section 7003.10(a) of Revised Regulation No. 3 as amended. With respect to the complainant's subsidy claims for the periods from April 1 to June 30, 1946 and from September 3 to October 14, 1946 the respondent's letter order denying the protest merely indicated that these claims had not yet been verified by it and it did not suggest that they had been invalidated or would not ultimately be paid.

The complainant urges that the respondent's first ground for invalidating all of its subsidy claims for the period from January 1, 1944 to December 29, 1945 is untenable and that its action is without basis in the regulation and should be set aside. In support of this contention the complainant asserts that under the applicable provision of Revised Regulation No. 3 the respondent is a mere paying agent without discretionary power to invalidate subsidy claims which in form meet the requirements of the regulation, except to the extent that such invalidating power is conferred by the regulation. The complainant further asserts that section 7003.10(c) of Revised Regulation No. 3 as amended made it the duty of the Price Administrator and not the respondent to investigate and determine whether an applicant's subsidy claims as filed were not an accurate reflection of the applicant's operations and the amounts of payments properly due. The complainant points out that in this case not only did the Price Administrator not make such a finding but on the contrary filed with the respondent an affirmative certificate that the complainant had not engaged in any manipulative practices.

This court is, however, without power to pass upon the questions thus raised since the alleged action of the respondent invalidating the complainant's subsidy claims for 1944 and 1945 upon the grounds just discussed has not been embodied in any definite order of invalidation which could be made the subject of protest and of review by this court. The powers of this court are purely statutory and, as we have indicated, when invoked as here under section 204(a) of the Emergency Price Control Act they are limited to the review of regulations or orders issued under section 2 of the Act. We have held that Revised Livestock Slaughter Payments Regulation No. 3 and its predecessor Livestock Slaughter Payments Regulation No. 3 are regulations issued under section 2(e) of the Act⁴ and that a determination by the Reconstruction Finance Corporation invalidating under the regulation a claim for a subsidy made thereunder is itself an order under section 2(e) of the Emergency Price Control Act which is subject to the protest and review procedure of sections 203(a) and 204(a) of the Act.⁵ We have not thought that such a determination need be in any particular form and have regarded action by the respondent as a reviewable order when incorporated in a letter or memorandum.⁶ In order to present a reviewable question to this court, however, there must be a definite order in some form which has finally invalidated the subsidy claims in question.⁷ A careful examination of the transcript of administrative proceedings filed in this court in this case fails to disclose such an order.

The respondent points to two letters which it regards as embodying reviewable orders invalidating the complainant's subsidy claims upon the grounds which we have been discussing. The first is a letter dated October 1, 1945 from the deputy director of the Office of Defense Supplies of the respondent to the acting assistant manager of its agency in New York. This letter was written in the light of a report on the complainant received from the Office of Price Administration. The letter stated, inter alia:

"* * * Even in the absence of OPA action, we should not ordinarily accept corrected claims in any case where it appeared the applicant had deliberately reported figures on his claims which did not reflect his actual operations and which resulted in greater subsidy payments than the applicant was entitled to.

"The OPA report indicates that this is the latter type of case. Consequently, the applicant should be given two alternatives; one, to withdraw the claims for the periods of February through July, 1945, inclusive and to make restitution of all amounts paid on these claims. If the slaughterer chooses this alternative, RFC will take no further action. The second alternative is for the slaughterer to have an audit made in support of his claims. This audit should, of course, be made at the applicant\'s expense and by an independent public accountant acceptable to this office your supervision. If this latter alternative is accepted, it should be made quite clear to the applicant that we should not necessarily accept corrected claims if the audit report does not support the original claims.

"The applicant should also be notified that claims will not be paid for June, 1945 or subsequent months until we are satisfied that any such claim is an accurate reflection of the applicant\'s actual operations. In other words, we should have to have an independent audit report in support of each such claim. Also we shall not accept current or future claims unless the applicant immediately installs detailed accurate record keeping system and agrees not only to keep detailed records but to exercise care in the preparation of the subsidy claims."

The complainant was notified of the alternatives proposed in this letter and it adopted the second of them, retaining with the approval of the respondent the accounting firm of Adler, Lowengrub & Company to make the audit suggested.

We think it is quite clear that the letter of October 1, 1945 does not embody a definite or final order of invalidation. On the contrary it indicates that the respondent intended to give the complainant the alternatives of either withdrawing its claims and making restitution of the amounts paid on them or of having an independent audit made in support of the claims. The latter, as we have seen, is the course which the complainant actually followed and, as the transcript discloses, the claims in question were subsequently given further...