United States v. Goldsmith Fruit Co.

• Decision Date: 25 February 1937
• Citation: 19 F. Supp. 147
• Parties: UNITED STATES v. GOLDSMITH FRUIT CO.
• Court: U.S. District Court — Southern District of Florida

19 F. Supp. 147

UNITED STATES v. GOLDSMITH FRUIT CO.

District Court, S. D. Florida.

February 25, 1937.

John S. L. Yost, Sp. Asst. to Atty. Gen., G. Osmond Hyde, Atty. Dept. of Agriculture, of Downey, Idaho, Herbert S. Phillips, U. S. Dist. Atty., of Tampa, Fla., and Lloyd C. Hooks, Asst. U. S. Dist. Atty., of Miami, Fla., for the United States.

Alto Adams, of Fort Pierce, Fla., and Thomas B. Adams, of Jacksonville, Fla., for defendant.

HOLLAND, District Judge.

The suit involves the validity of the order provisions of the Agriculture Adjustment Act, approved May 12, 1933, as amended on August 24, 1935 (7 U.S.C.A. § 601 et seq.), the validity of Order No. 7, which is an order regulating the handling of citrus fruit grown in the State of Florida, and which was issued by the Secretary of Agriculture of the United States pursuant to section 8c of title I of said act, as added by Act Aug. 24, 1935, § 5 (7 U.S.C.A. § 608c). The defendant is a handler of citrus fruit, and it is alleged by the sworn bill of complaint that said defendant, in violation of the provisions of the order, and in the regular course of its business in handling, selling, and shipping grape fruit, did ship during the effective period of each of the weekly pro rata regulations from points in the State of Florida to points in other states of the United States large quantities of grape fruit in fresh form grown in the State of Florida in excess of the allotments made to the defendant by the Secretary of Agriculture, and in excess of the quantity entitled to be shipped by the defendant pursuant to the allotments made to the defendant as increased by the permissible overshipments. The shipments thus made by the defendant are set forth in the bill of complaint.

An answer to the bill of complaint, duly verified, was filed in which was incorporated a motion to dismiss the bill of complaint because the same is bad in substance; there being assigned seven grounds for said motion. Affidavits in support of the bill and of the answer were filed at a hearing held before me at Fort Pierce, Fla., on the 12th day of February, 1937, and oral testimony in support of the bill and in support of the answer was heard on this application for temporary injunction. Argument on the motion continued over to the next day, February 13, 1937, and the matter was taken under advisement.

Very comprehensive briefs have been submitted. The brief for the defendant embraces ten points, most of which points are singly and collectively submitted in line with the motion to dismiss the bill incorporated in the answer.

By section 8c (1), 7 U.S.C.A. § 608c (1), the authority to the Secretary of Agriculture to issue the order is granted. By section 8c (2), 7 U.S.C.A. § 608c (2), fruits are made an applicable commodity. By section 8c (3) (4), 7 U.S.C.A. § 608c (3, 4), provision is made for notice and hearing and the findings by the Secretary, and the issuance of the order. By section 8c (6) (7), 7 U.S.C.A. § 608c (6, 7), specific provision is made of a mandatory and permissive nature as to the terms of said order. The order in this case embraces provisions complying with section 8c (6) (A, C, and E), 7 U.S.C.A. § 608c (6) (A, C, E), and section 8c (7) (C and D), 7 U. S.C.A. § 608c (7) (C, D).

The order of the Secretary as authorized (unless it is accomplished by the approval of the President, as provided for in section 8c (9), 7 U.S.C.A. § 608c (9), is dependent upon the prerequisite that "not less than 50 per centum of the volume of the commodity or product thereof covered by such order which is produced or marketed within the production or marketing area defined in such order have signed a marketing agreement." 7 U.S.C.A. § 608c (8). And further it is provided that said marketing agreement must have been entered into pursuant to section 8b (7 U.S.C.A. § 608b).

And further it is provided that before finally authorizing and making said order the Secretary must determine that the issuance of such order is approved and favored by two-thirds of the producers, or two-thirds of the volume produced of such commodity, as specified in either section 8c (8) (A or B), 7 U.S.C.A. § 608c (8) (A or B), and further that there is compliance with subdivision 10 (7 U.S.C.A. § 608c (10) as to the manner of regulation and applicability.

There was filed in this case in addition to the motion to dismiss the bill of complaint a separate instrument styled "motion to dissolve temporary restraining order." The subject-matter of this last-mentioned motion is the subject-matter of point 1 of defendant's brief. I am of the opinion that the statute involved is not of such doubtful validity as contended by the defendant, and that this motion should be overruled.

Point 2 of the defendant's brief attacks the constitutionality of the act generally, and my conclusions sustaining the validity of the said act are dealt with when other points in defendant's brief are considered more in detail.

Point No. 3 is as follows: "It appears from the face of the bill and from the evidence that an agreement by not less than fifty per cent. (50%) of handlers, as required by section 8c (6), was not obtained, and in consequence the Secretary of Agriculture, never acquired any jurisdiction or power to issue handling Order No. 7."

This is an attack upon the jurisdiction or power of the Secretary to issue the handling order No. 7, it being alleged that the condition precedent to the issuance of the order had not been complied with. The bill of complaint alleges compliance with this condition precedent, but the answer attacks the genuineness and binding effect of the voluntary marketing agreement. On this application for temporary injunction I am taking the bill at its face value with reference to the genuineness of the signatures to the marketing agreement.

Point No. 4 attacks the legal sufficiency and validity of the order, while point No. 3 makes the same attack from a factual standpoint. I am of the opinion that neither attack is good. As stated, on the factual standpoint, I have considered the marketing agreement from its face value, and as having been genuinely executed by not less than 50 per cent. of the handlers as set forth in the bill of complaint; and as to the legal sufficiency and validity, I am of the opinion that this attack is not well taken.

It is contended that the marketing agreement was executed on the one part by the Secretary of Agriculture and, as parties of the second part, by shippers who during the shipping season of 1934-1935 handled more than 50 per cent. of the volume of fruit handled in that season. The contention of the defendant is that the order in question is made binding on handlers of the 1936-1937 crop, when the personnel in this class is not necessarily the same as the handlers of the previous season, when the prerequisite voluntary marketing agreement was executed. Compliance with section 8 (c) (8), 7 U.S.C.A. § 608c (9), is a condition precedent to the effectiveness of the order. A marketing order of the Secretary (not authorized by the President) is authorized, and there are necessary elements to be incorporated therein outlining the policy and yard stick measure which are set out in specific sections of the act, but before such order becomes effective it is provided that a marketing agreement of a voluntary nature must exist, and be of a proper nature. The marketing agreement provided by section 8b (7 U.S.C.A. § 608b) required no specific number of handlers to make it effective and binding upon those who did sign such an agreement. But this condition precedent to the effectiveness of the order by the Secretary requires that such marketing agreement shall have been signed by not less than 50 per cent of the volume of the commodity or product thereof covered by such order, which is produced or marketed within the production or marketing area defined in such order.

The consent of the defendant is not necessary to the validity of the order. The approval of the President could have made it involuntarily effective. But without the President's approval, it was necessary for there to have been in existence a voluntary marketing agreement, which was a matter of agreement between the Secretary and agreeing handlers, such agreement consisting of two parties, one the Secretary and one the handlers collectively, and the terms of this voluntary agreement must have been approved by not less than 50 per cent. of the volume of such fruit as of the time of the execution of the said agreement, and the final order must embrace and include the terms of this voluntary agreement. Consent is involved in this voluntary agreement, but consent of the handler is not necessary to the validity of an order issued by the Secretary. As a limiting feature on the authority of the Secretary, the provision is made as to the consent of 50 per cent. of the volume, which must have been theretofore obtained by voluntary agreement. Counsel for the defendant puts stress upon the necessity of this voluntary agreement being signed by 50 per cent. of the volume of the current season, and that the act is faulty in not specifically providing that this 50 per cent. of volume shall be measured by the particular season when the marketing agreement was in fact executed. With this contention I cannot agree, as I am of the opinion that there is read into the act the fact that 50 per cent. of the volume relates to 50 per cent. of the volume of the fruit at the time the agreement was executed.

The defendant contends that those handlers who have entered into a voluntary agreement with the Secretary have legislated upon the subject-matter because the order of the Secretary must conform to the provisions of the voluntary agreement. With this I cannot agree. The Secretary has made the order according to a well-defined policy set forth in the act itself, which includes terms and conditions prescribed by the act. The existence of a...