Utah Junk Co. v. Fleming

• Decision Date: 19 December 1946
• Docket Number: No. 184.,184.
• Citation: 159 F.2d 440
• Parties: UTAH JUNK CO. v. FLEMING, Temporary Controls Administrator.
• Court: U.S. Temporary Emergency Court of Appeals Court of Appeals

159 F.2d 440 (1946)

UTAH JUNK CO. v. FLEMING, Temporary Controls Administrator.

No. 184.

United States Emergency Court of Appeals.

Heard July 10, 1946.

Decided December 19, 1946.

Rehearing Denied January 15, 1947.

Writ of Certiorari Denied March 31, 1947.

Keith L. Seegmiller, of Washington, D. C. (Ernest L. Wilkinson, of Washington, D. C., on the brief), for complainant.

Jacob D. Hyman, Associate Gen. Counsel (Richard H. Field, Gen. Counsel, William R. Ming, Jr., Chief, Court Review Price Branch, and Carl H. Fulda, Irving J. Helman, and John J. Downey, Jr., Attys., all of the Office of Price Administration, all of Washington, D. C., on the brief), for respondent.

Before MAGRUDER, McALLISTER, and LAWS, Judges.

Heard at Washington July 10, 1946.

Writ of Certiorari Denied March 31, 1947. See 67 S.Ct. 1084.

MAGRUDER, Judge.

When this case was here before (Utah Junk Co. v. Bowles, Em.App., 150 F.2d 963) we dismissed the complaint, not on the merits, but on a point of procedure as to which it turned out we were mistaken. Since at the time the protest was filed the Price Administrator had already amended the regulation prospectively in a manner acceptable to complainant, we thought that the protest was untimely. Our idea was that the primary purpose of the protest procedure was to afford the Price Administrator an opportunity to consider the desirability of prospective changes in regulations in the light of objections set forth in protests by persons subject thereto. This is a matter within his special administrative competence; which, we thought, could hardly be said of a declaratory opinion by the Price Administrator on the question of law as to the past validity of a superseded provision of a regulation. If an adjudication of past validity becomes important, as in a criminal or civil enforcement suit (neither of which is pending here), § 204(e) of the Emergency Price Control Act, as amended in 1944, 58 Stat. 639, 50 U.S.C.A. Appendix, § 924(e), furnishes a remedy to the alleged violator; he may, pursuant to leave of the enforcement court, file a complaint directly in this court challenging the validity of the superseded regulation upon which the enforcement proceeding was predicated. Our judgment dismissing the complaint was taken up on certiorari. The Supreme Court reached the conclusion that there was no warrant for reading any qualification into the broad language of § 203(a), as amended, 50 U.S.C.A. Appendix. § 923(a), to the effect that a protest might be filed "at any time" after the issuance of a regulation. Therefore, that court held that an adjudication of past validity of a superseded regulation might be obtained via the protest route, as well as by a complaint filed directly in this court under § 204(c). 328 U.S. 39, 66 S.Ct. 889. The case is now back to us on remand for consideration of the merits.

Complainant is engaged in the business of purchasing, preparing and selling scrap metal in Salt Lake City, Utah. There is a concentration of non-ferrous smelters in the States of Utah and Montana. Lead ores are treated in blast furnaces which require as a fluxing agent scrap iron, known as smelter fluxing scrap, in sizes not greater than 12 × 24 in. and preferably 12 × 22 in. This is smaller than the scrap suitable for use in the steel industry. In the more populous and heavily industrialized areas of the country where steel plants are located and where the greatest need for scrap exists, scrap is available in great quantities and in innumerable sizes and shapes so that small pieces of scrap metal can be made available merely by sorting. The area in which complainant operates is sparsely settled, and available supplies of scrap metal are correspondingly small. It has been impossible for complainant to supply from available stocks sufficient scrap to meet lead blast furnace requirements without cutting the scrap by the use of electric shears and torches to the specifications required by lead smelters. Complainant has the facilities and trained personnel necessary for this operation. For many years complainant has furnished to the United States Smelting, Refining & Mining Company an important part of its fluxing scrap requirements for its large lead smelter at Midvale, near Salt Lake City.

Maximum prices for iron and steel scrap were first established by Price Schedule No. 4 — Iron and Steel Scrap, issued April 2, 1941, under executive authority (6 F. R. 1767). After the enactment of the Emergency Price Control Act of 1942, that schedule was reissued as Revised Price Schedule No. 4 and republished in the Federal Register on February 21, 1942 (7 F. R. 1207). After frequent amendments RPS 4 was, on June 30, 1944, revised and reissued as Maximum Price Regulation 4 (9 F. R. 7330).

Section 13 of RPS 4 contained definitions of 23 grade specifications of scrap and established maximum prices for the listed grades. There was no separate category for fluxing scrap as such; but it does not follow from this, as complainant insists, that RPS 4 as originally issued left fluxing scrap entirely free of price control. RPS 4 was quite clearly intended as a comprehensive regulation governing all phases and aspects of the iron and steel scrap industry. Section 1 provided that, regardless of the terms of any contract, "no person shall sell, offer to sell, deliver, or transfer iron and steel scrap * * * at prices higher than the prices set forth" in subsequent sections of the schedule. Section 11(b) defined "iron and steel scrap" as meaning "all kinds and grades of imported and domestic iron and steel scrap including iron and steel railroad scrap." Fluxing scrap is certainly a kind of "iron and steel scrap". Though specifications for fluxing scrap were not separately listed in RPS 4, fluxing scrap fell within the more inclusive specifications of No. 2 heavy melting steel.¹ In other words, fluxing scrap might be regarded as a more selective No. 2 heavy melting steel, particularly in regard to the detail that fluxing scrap had to be in smaller-sized pieces than allowed under the specifications for No. 2 heavy melting steel. Notwithstanding this, § 13(a), footnote 6, contained the following provision: "Except upon prior approval by the Office of Price Administration, no grade of scrap deemed by the buyer or seller or both to be superior to any grade listed above shall be purchased at a premium above the corresponding listed grade * * *." Footnote 6 also provided: "In no case may special preparation charges be added to the prices listed above." This provision was shortly thereafter amended by Amendment No. 2 to RPS 4, issued March 30, 1942 (7 F. R. 2507), so as to read: "Except upon prior approval by the Office of Price Administration, no special preparation charges may be added to the prices listed above."²

From the foregoing it is apparent that complainant was forbidden to sell fluxing scrap at a premium over the prices established by RPS 4 for heavy melting steel, or to make a preparation charge for the operation of cutting the scrap metal to the required sizes for fluxing scrap, without first applying for and obtaining the approval of the Office of Price Administration.

On April 25, 1942, a representative of the Office of Price Administration visited complainant's offices and inspected its books and records. He informed complainant that it could not lawfully charge for fluxing scrap more than the maximum prices established for No. 2 heavy melting steel. Notwithstanding this, in the period April 25, 1942, to February 10, 1943, complainant made shipments of fluxing scrap to U. S. Smelting, Refining & Mining Company, billed at prices in excess of such ceiling, though complainant did not collect or attempt to collect any overcharge above the ceiling.

In May, 1942, complainant began negotiations with the Salt Lake City office of the OPA seeking to be allowed to add a special preparation charge for cutting scrap metal down to the sizes required for fluxing scrap. It is stated in the Price Administrator's opinion — and not controverted by complainant — that in 1942 and 1943 "the officials of the Salt Lake City office advised the Protestant repeatedly that they had no authority whatsoever to grant requests for price increases and that relief could be granted only by the Price Administrator in Washington; they even suggested that Protestant communicate with other scrap dealers in the Salt Lake City area and file a joint petition for relief." Complainant did try "to get all scrap dealers in Salt Lake City and vicinity to agree upon specifications and regulations which would suit the sale of scrap for smelting purposes"; but extended efforts produced no agreement along this line.

In November, 1942, U. S. Smelting, Refining & Mining Company filed with the Price Administrator in Washington a formal petition for amendment of RPS 4, requesting permission to pay complainant and others an extra fee for fluxing scrap. Attached to the petition was an affidavit from complainant's president stating that such preparation charge was necessary to cover the cost of cutting up scrap for smelting use in lead blast furnaces. This petition for amendment was denied by the Price Administrator in January, 1943, on the ground that the specifications for "foundry steel, 2 feet and under" and "foundry steel, 1 foot and under" established by Amendment No. 10 to RPS 4, issued January 16, 1943 (8 F. R. 858), were substantially in accordance with the requirements outlined in the petition.

The new grades of foundry steel proved not to be a full answer to complainant's special problem. The Industry Advisory Committee at a meeting held in September, 1943, considered the question whether the premiums provided by Amendment No. 10 for foundry steel should also be allowed for fluxing scrap of the same sizes, including, however, certain materials, such as pipe and cable, not permitted in the foundry steel specifications but suitable for use in lead blast...