Wells Lamont Corporation v. Bowles
| Decision Date | 01 May 1945 |
| Docket Number | No. 168.,168. |
| Citation | 149 F.2d 364 |
| Parties | WELLS LAMONT CORPORATION v. BOWLES, Price Administrator. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
John R. Whitman, of Chicago, Ill. (Ernest S. Ballard and Karl D. Loos, both of Chicago, Ill., on the brief), for complainant.
Jacob D. Hyman, Chief, Court Review Price Branch (Richard H. Field, Gen. Counsel, Nathaniel L. Nathanson, Associate Gen. Counsel, of Washington, D. C., Lester N. Salwin, and Samuel M. Singer, Attys., all of the Office of Price Administration, all of Washington, D. C., on the brief), for respondent.
Before MARIS, Chief Judge, and LINDLEY and LAWS, Judges.
Heard at Chicago January 19, 1945.
Complainant, a manufacturer of leather and cotton work and dress gloves, complains of the denial on September 2, 1944, of its protest filed July 10, 1944, questioning the validity of Section 1499.2 of General Maximum Price Regulation and Amendment 33 thereto.
Complainant produced more than 400 styles of gloves in 1941. On December 1, 1941, it issued a price list which, on January 22, 1942, it withdrew by notice to its customers, announcing a new one March 17, 1942. Shipments to apply on commitments under the December list continued into the month of March, however, and during that month there were deliveries of at least 112 styles of gloves on the basis of the December, 1941, prices. Of these, 10 involved sales made during March and the remaining 102, orders accepted prior to March. Approximately 55 styles were delivered in March at the higher prices of the March price list.
General Maximum Price Regulation (7 Fed.Reg. 3153), issued April 28, 1942, went into effect May 11, 1942. Section 1499.2 provides that the maximum price for any commodity shall be the highest price charged by the seller during March, 1942, (1), for the same commodity or, (2), if no charge was made for the "same commodity," that for "the similar commodity most nearly like it." "Highest price charged by a seller during March, 1942" is defined as (a) "the highest price which the seller charged * * * for a commodity delivered during March 1942 to a purchaser of the same class; or (b) if the seller made no such delivery * * * during March 1942, his highest offering price for delivery * * * during that month to a purchaser of the same class; * * *."
Complainant's president, Mr. Wells, on June 3, 1942, discussed the regulation and its application to his company with the Acting Chief of the Work Clothing Unit of the Office of Price Administration and his assistant. These officials informed him that the regulation applied to all the gloves his company sold and that its ceiling prices had been established at the prices quoted in its March 17, 1942, price list. Relying on this oral statement, complainant continued sales at its March prices until August 18, 1943, when it received a letter from the chief enforcement attorney of the Office of Price Administration asserting that by so doing it was violating the Regulation. On August 24, 1943, respondent instituted an action for damages against complainant, which is still pending.
Complainant contends that Section 1499.2 as construed by the Administrator, unreasonably deprives it of the right to avail itself of its customary in-line pricing methods and thus violates Section 2(h) of the Emergency Price Control Act, 50 U.S.C.A. Appendix § 902(h), providing that "The powers granted in this section shall not be used or made to operate to compel changes in the business practices, cost practices or methods, or means or aids to distribution, established in any industry, or changes in established rental practices, except where such action is affirmatively found by the Administrator to be necessary to prevent circumvention or evasion of any regulation, order, price schedule, or requirement under this Act."
Complainant declares that use of the in-line pricing system is common in the industry; that it has adhered to the practice for many years and employed it in preparation of the March price list. It defines the term as a plan by which differentials with respect to the selling prices of its various gloves within the same classes are maintained and explains the operation as follows. Complainant manufactures general groups of gloves, among which are full leather, leather palm, rubber, jersey and cotton flannel. Each group is composed of several classes, each of which in turn includes numerous styles. Differences in weight, quantity and quality of material in different styles within a single class carry standardized differentials in selling prices. Thus, in the cotton flannel glove group, the 8-ounce glove is used as the base. Gloves made of heavier material in the same style are priced by adding a per ounce differential to the base glove; and the prices of the lighter weights are found by subtracting the differential from the heavier glove.
Complainant contends that the regulation, as construed by the Administrator, is invalid in not permitting it to utilize as its ceiling price for a style of glove delivered during March, 1942, on prior commitments, the price which is determined for that style by the application of its alleged traditional and customary price differentials and that failure to approve this method, which is a business practice and a means and aid to distribution, constitutes a violation of Section 2(h). In the event we find that Section 1499.2 is valid, complainant seeks a ruling that it be permitted to file application for adjustment on grounds of "hardship" or "abnormally low prices," as was formerly permitted prior to the issuance of Amendment 33, November 2, 1942, superseding Section 18. The latter had permitted adjustment of established prices in such cases, provided such relief did not cause or threaten to cause an increase in retail prices. The Amendment terminated the right to file requests for such adjustment after a specified date in 1942, and authorized relief thereafter only upon a showing that it was necessary in order to relieve a local shortage in the supply of an essential commodity. Complainant insists that, inasmuch as it had relied upon the oral interpretation rendered by officials of the Office of Price Administration and was not notified of any claim that it was violating the regulation until...
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