United States v. Russell-Taylor, Inc.

• Decision Date: 04 February 1946
• Docket Number: No. 28465.,28465.
• Citation: 64 F. Supp. 748
• Parties: UNITED STATES v. RUSSELL-TAYLOR, Inc., et al.
• Court: U.S. District Court — Western District of Michigan

64 F. Supp. 748

UNITED STATES v. RUSSELL-TAYLOR, Inc., et al.

No. 28465.

District Court, E. D. Michigan, S. D.

February 4, 1946.

John C. Lehr, U. S. Atty., of Detroit, Mich. (argument by Morris Zwerdling, Asst. U. S. Atty., of Detroit, Mich.), for the government.

Bodman, Longley, Bogle, Middleton & Armstrong, of Detroit, Mich. (argued by Henry C. Bogle, of Detroit, Mich.), for respondents.

KOSCINSKI, District Judge.

Respondents are charged in the information with violation of War Food Order 13, Amendment 2, restricting the sale or delivery of "filled cream" having a total content of all oil and fat, including milk fat, in excess of 19 per cent (9 F.R. 6145). By interposing a demurrer and motion to quash the information the respondents challenge the validity of this order.

This regulation was issued under authority of the Second War Powers Act of March 27, 1942, 56 Stat. 176, 50 U.S.C.A. Appendix, Title III, § 633, amending Sec. 1152, and pursuant to Executive Order 9280, 50 U.S.C.A.Appendix § 601 note (7 F.R. 10179), delegating authority to the Secretary of Agriculture "to assume full responsibility for and control over the Nation's food program."

The motions as filed also attack the constitutionality of the Second War Powers Act and validity of Executive Order 9280 issued by the President under authority of that statute. In the course of oral arguments on these motions in open court respondents conceded the constitutionality of both the statute and executive order in view of two recent decisions by the appellate court of this circuit, upholding the constitutionality of both. O'Neal v. United States, 6 Cir., 140 F.2d 908, and Varney v. Warehime, 6 Cir., 147 F.2d 238. Respondents recognize these decisions as binding on this court. This concession, it will be noted here, was made only for the purpose of deciding the pending motions and respondents reserved their arguments on the constitutionality of such act and order for the trial of this case on the merits.

There remains here for decision, then, the narrow question whether the War Food Administrator under the delegation of authority to him exceeded that authority in issuing Amendment 2 to War Food Order 13.

The information contains a recital of the several acts of Congress granting war powers to the President such as the Act of Congress of June 28, 1940, 54 Stat. 676, 50 U.S.C.A.Appendix § 1152 et seq., as amended by the Act of Congress of May 31, 1941, 55 Stat. 236, 50 U.S.C.A.Appendix, § 1152, the "National Defense Act," as amended by the "Second War Powers Act, 1942," as further amended and extended by Section 1501 of the Act of December 20, 1944, Public Law 509, 78th Congress, 50 U.S.C.A.Appendix § 633 et seq., providing, among other things, that "Whenever the President of the United States 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." The last mentioned Act further empowers the President to exercise any of the hereinbefore mentioned powers, authority, or discretion through such department, agency, or officer of the government as he may direct and in conformity with any rules or regulations which he may prescribe.

The President, under the power to delegate the authority granted him, and as Commander-in-Chief of the Army and Navy, by Executive Order 9280 issued December 5, 1942, delegated to the Secretary of Agriculture the powers, authority and discretion with reference to the control of the national food program and the assignment and allocation of food for direct and indirect military, other governmental, civilian, and foreign needs, including authority to the Secretary to redelegate any or all such powers, authority and discretion, and further by said Executive Order 9280 established the Food Distribution Administration of the Department of Agriculture, under the direction and supervision of a Director of Food Distribution to be appointed by the Secretary of Agriculture.

The information further states that on February 2, 1943, the Secretary of Agriculture, in accordance with the aforesaid authority, and to assure an adequate supply and efficient distribution of dairy products to meet war and essential civilian needs, issued Food Distribution Order 13 (8 F.R. 1479), since designated as War Food Order 13 (9 F.R. 4319), effective February 3, 1943, restricting the sale and delivery of cream having a milk fat content in excess of 19% to designated persons authorized to purchase and receive said products pursuant to the provisions of said order; that under powers and authority vested in him by the Act of Congress the President of the United States by Executive Order 9322 (8 F.R. 3807), as amended by Executive Order 9334, 50 U.S.C.A.Appendix § 601 note (8 F.R. 5423), established a War Food Administration within the Department of Agriculture and delegated to the War Food Administrator all the powers, duties and functions granted to the Secretary of Agriculture under the hereinbefore described Executive Order 9280.

War Food Order 13, as amended by Amendment 2, provided as follows:

1. (a)-6. "`Filled Cream' means any milk, cream or skim milk, whether or not condensed, evaporated, concentrated, powdered, dried, or desiccated, to which there has been added, or with which there has been blended or compounded, any fat or oil other than milk fat, so that the resulting product is an imitation of cream or in semblance thereof, whether or not such resulting product contains any other ingredient."

2. (b)-3. "No person shall, after July 31, 1944, sell or deliver filled cream having a total content of all oil and fat, including milk fat, in excess of 19 per cent, but this shall not be construed to permit the manufacture, sale, or delivery of filled cream in violation of the Filled Milk Act (21 U.S.C. 1940 ed., 61—64 21 U.S.C.A. §§ 61-64)."

Pursuant to the authority vested in him by War Food Order 13, as amended by Amendment 2, the Director of Distribution, War Food Administration, upon petition for relief from hardship filed by Russell-Taylor, Inc., the corporate defendant, did establish quotas and authorize the sale of "filled cream" by said defendant during the quota periods of August, September, October, November, December, 1944 and January, 1945. That the quotas thereby established for each of the above named quota periods were fixed and determined to be 75% of all milk solids utilized by said corporation in the production of filled cream during the corresponding month of the year 1943.

The information charges that during the aforesaid quota periods the respondents did unlawfully, wilfully and knowingly sell and deliver to divers persons, under the trade name of "Devonshire Topping," filled cream having a total content of all oil and fat, including milk fat, in excess of 19% and in excess of the quota of milk solids allotted to said respondent as aforesaid, in violation of the Second War Powers Act, 1942. There are six counts in the information, each charging a similar violation during each month stated.

The grounds of the motion to quash include all the grounds of the demurrer and the additional ground that corporate defendant's product, "Devonshire Topping," is not "filled cream" within the meaning of War Food Order 13 as amended by Amendment 2. The grounds of both motions, with the additional ground in the motion to quash noted above, are:

1. That War Food Order 13 and the amendments thereto are invalid as not being authorized by any act of Congress or by the provisions of Executive Order 9280.

2. That Amendment 2 to said War Food Order 13 is invalid as not being authorized by act of Congress or by said Executive Order 9280; that it was arbitrary and capricious and not based upon any findings of facts.

3. That the establishment of quotas for the sale of corporate defendant's product, the violation of which quotas is charged in the information as being a violation of War Food Order 13, as amended by Amendment 2, and as being contrary to the Second War Powers Act, 1942, was not authorized by act of Congress or by said War Food Order 13, as amended by Amendment 2, and the alleged violation thereof is not contrary to such statute or to said order as amended.

4. That the quota restriction was not an allocation but an absolute prohibition of the sale of respondents' product.

5. That the word "material" as used in the Second War Powers Act, 1942, does not mean "food."

6. That this regulation violates the due-process clause of the Fifth Amendment to the Constitution of the United States.

War Food Order 13, as Amended.

War Food Order 13 was issued on February 2, 1943, effective February 3, 1943. The order was a re-issuance of Conservation Order M-259, as amended, issued by the War Production Board on November 25, 1942 (7 F.R. 9811; 7 F.R. 10329; 7 F. R. 10616), and revoked on March 26, 1943 (8 F.R. 3780). The Conservation Order published this finding:

"The fulfillment of requirements for the defense of the United States have created a shortage in the supply of milk and milk products for defense, for private account and for export, and the following order is deemed necessary and appropriate in the public interest and to promote the national defense."

War Food Order 13 as originally issued restricted to 19% the milk-fat content of cream which producers (processors) could deliver except to another producer. On August 26, 1943, Amendment 1 (8 F.R. 11835) to said order was issued, effective September 1, 1943. This amendment extended the restrictions on the sale of cream containing more than 19% butter fat to the sale of cream products and prohibited the sale or delivery,...