United States v. Robinson

• Citation: 106 F. Supp. 212
• Decision Date: 19 August 1952
• Docket Number: Civ. No. 2485.
• Parties: UNITED STATES v. ROBINSON et al.
• Court: U.S. District Court — District of South Dakota

106 F. Supp. 212

UNITED STATES v. ROBINSON et al.

Civ. No. 2485.

United States District Court, D. North Dakota, S. D.

August 19, 1952.

Harry Lashkowitz, Asst. U. S. Atty., Fargo, N. D., and Milton E. Moskau, Sp. Asst. U. S. Atty., Grand Forks, N. D., for plaintiff.

E. T. Christianson, Atty. Gen., W. C. Lynch, Asst. Atty. Gen., and Milton K. Higgins, (of Higgins & Donahue), Bismarck, N. D., and J. F. X. Conmy (of Burnett, Bergesen, Haakenstad & Conmy) Fargo, N. D., for defendants.

VOGEL, District Judge.

The United States of America, plaintiff, brings this action against the individual members of the State Livestock Sanitary Board of the State of North Dakota and against the North Dakota Stockmen's Association, a corporation. The complaint charges violation of Ceiling Price Regulation 34, which was promulgated in accordance with the provisions of the Defense Production Act of 1950, as amended, 50 U.S.C.A.Appendix, § 2061 et seq., in that it is claimed that the defendants, contrary to the provisions of the Regulation, increased the charge for inspecting brands on cattle sold in sales rings in North Dakota from 12¢ to 15¢ per head. As alleged, the total overceiling charges for the period sued for approximate $5,868.24. The complaint seeks a permanent injunction and asks for damages of three times the amount of the alleged overcharges. The case has been submitted to the Court upon the pleadings and a stipulation of facts entered into by all parties.

After the Government had rested, the defendants made a motion for dismissal of the action upon the following grounds:

"1. That the O.P.S. has no jurisdiction over the rates of a public utility.

"2. The doctrine of primary administrative jurisdiction requires a reference back to the rate-making body or bodies rather than a disposition thereof in this court in this type of action, and that that is true even if the rate increase has not been properly accomplished.

"3. There is no proof in the record of the specific offense charged in the complaint.

"4. There is no showing in the record of any price increase which is within the purview of the Defense Production Act of 1950 or the lawful Regulations promulgated thereunder.

"5. The O.P.S. has no jurisdiction or authority to establish, freeze or fix a rate for brand inspection.

"6. The Regulations of the O.P.S. in and of themselves do not provide for the regulation of brand inspection rates or fees.

"7. The O.P.S. has no jurisdiction or authority over not only the rates of public utilities but over any state agency exercising a purely police power within the state.

"8. There is no showing in the record that the President, as provided in the Act, has authorized the institution of a suit for civil damages and that such suit, in any event, is improper in connection with an injunction proceedings."

Insofar as it may be applicable to the situation with which the Court is now involved, the Defense Production Act of 1950, as amended, was passed by the Congress to promote the national defense through the maintenance of the nation's economic strength by the prevention of inflation in prices and wages for materials and services in the regular course of trade or business.

Among other things, plaintiff's complaint alleges:

"IV

"a. Section 3 of the Regulation prohibits, on and after May 16, 1951, the sale, and the purchase in the course of trade or business, of any service covered by the Regulation at a price higher than the ceiling price prescribed by the Regulation for the seller or supplier. (Emphasis supplied.)

"b. Section 5(a)(1) of the Regulation sets forth the methods for determining the ceiling price in detail, of the services of the defendant, North Dakota Stockmen's Association.

"c. The highest price at which the defendant, North Dakota Stockmen's Association supplied such livestock brand inspection service for livestock coming into any public livestock market, including sales rings, buying stations or packing plants within the State of North Dakota during said base period, as set forth in the Regulation, including December 19, 1950 to January 25, 1951, inclusive, was 12¢ per head of livestock so brand inspected."

The complaint further alleges:

"VI

"That from August 1, 1951 to the date of this complaint, the defendant, North Dakota Stockmen's Association has sold and supplied services as described in Paragraph V above, for fees set as therein described, at 15¢ per head of livestock so brand inspected, and for which maximum prices of 12¢ per head of livestock so brand inspected were established and are established by the Regulation, as above set forth."

The first and overall question involved in the case is whether or not Congress intended, by the passage of the Defense Production Act of 1950, as amended, to include in its classification of services, so regulated, the brand inspection of livestock and fees charged therefor within the respective states.

A further identity of the parties involved appears essential to an understanding of the Defense Production Act as it may or may not be applicable hereto.

The North Dakota Stockmen's Association is a non-profit corporation organized and existing under the laws of the State of North Dakota. The purposes of the corporation, in brief, were "for the advancement of the interests of the livestock industry of the State of North Dakota and for the protection of the same against fraud and swindlers and to prevent the stealing, taking and driving away of cattle, horses and all other livestock from the rightful owners thereof, and to enforce the stock laws of the State of North Dakota, to make a continuous investigation and study of the livestock industry of the state; to make recommendations relative thereto to public officers and other institutions, organizations, boards and bodies, and generally take whatever action may be deemed necessary in promoting the general welfare of the livestock industry in the State of North Dakota."

The State Livestock Sanitary Board of the State of North Dakota is an agency of the State of North Dakota so created by statute. (Chapter 36-01 NDRC 1943 as amended by Chap. 227 N.D.S.L.1949.) It has been stipulated that the individual defendants acting as members of the State Livestock Sanitary Board are vested with certain regulatory powers over the inspection of cattle for brands and setting the fees to be charged therefor in accordance with Chapter 36-22 NDRC 1943, as amended by Chapter 231 N.D.S.L.1949.

It has also been stipulated that the North Dakota Stockmen's Association has registered with the United States Secretary of Agriculture under the Packers and Stockyards Act in accordance with Section 217a of Title 7, U.S.C.A., as the market agency to make brand inspections in the State of North Dakota of cattle sold at livestock markets posted under and subject to the Federal Packers and Stockyards Act. (Such inspection at the one posted yard in North Dakota is not involved in this case as the fees charged therefor are set by the Secretary of Agriculture.) It has further been stipulated that in accordance with said section of the Act, the North Dakota Stockmen's Association is the only authorized market agency in the State of North Dakota authorized to make brand inspections under the Packers and Stockyards Act.

It has also been stipulated that Section 3 of Ceiling Price Regulation 34 prohibits on and after May 16, 1951, "the sale and the purchase in the course of trade or business of any service covered by the Regulation at a price higher than the ceiling price prescribed by the Regulation for the seller or supplier, of which the Court is asked to take judicial notice."

It was further stipulated, in effect, that the highest price at which the North Dakota Stockmen's Association supplied cattle brand inspection in sales rings, buying stations and packing plants in North Dakota during the base period of December 19, 1950, to January 25, 1951, inclusive, was 12¢ per head of cattle so brand inspected.

36-2202 of the 1949 Supplement to the North Dakota Revised Code of 1943 provides as follows:

"North Dakota Stockmen's Association's Authority. The North Dakota Stockmen's Association, a livestock association duly organized under the laws of the state of North Dakota, and duly registered as a market agency under the act of congress commonly known as the packers and stockyards act, is hereby authorized, for the better protection of the livestock industry of the state of North Dakota and for the purpose of securing a unifority of inspection and cooperation with the department of agriculture of the United States, to make an inspection to determine ownership, of all cattle shipped or consigned from this state to any public livestock markets, including sales rings, buying stations, or packing plants within or without the state of North Dakota."

Section 36-2203 of the 1949 Supplement to the North Dakota Revised Code of 1943, provides:

"Rules and Regulations; Fees for Inspection. The North Dakota livestock sanitary board shall, with the advice of the officers of the North Dakota Stockmen's Association, make rules regulating the inspection of cattle for brands at sales rings, packing plants, buying stations and shall set the fees to be charged by the brand inspector. Brand inspectors under this act (chapter) shall charge and collect fees for inspections on all shipments or consignments of cattle at livestock markets, at the rate authorized by the United States department of agriculture, and shall charge and collect fees for inspection at sales rings, buying stations and packing plants as shall be set by the livestock sanitary board, which funds, so collected, shall be paid into the general fund of the North Dakota Stockmen's Association." (Emphasis supplied.)

The chapter (36-22) also provides that brand inspectors of the association (North Dakota Stockmen's Association) may receive and receipt for funds for the sale of estray cattle and for the handling...