Woods v. Laabs

• Decision Date: 11 July 1950
• Docket Number: No. 286.,286.
• Citation: 92 F. Supp. 220
• Parties: WOODS, Housing Expediter, v. LAABS.
• Court: U.S. District Court — Western District of Michigan

92 F. Supp. 220

WOODS, Housing Expediter, v. LAABS.

No. 286.

United States District Court W. D. Michigan, N. D.

July 11, 1950.

Paul Marshall, Sanford S. Simms, Sol W. Wyman and Albert F. Shulman, all of Cleveland, Ohio, for plaintiff.

Ivan D. Wright, Ironwood, Mich, for defendant.

STARR, District Judge.

On December 29, 1948, the housing expediter filed complaint in this court against the defendant landlord pursuant to sections 204(b) and 206(a) and (b) of the Housing and Rent Act of 1947, as amended in 1948, 62 Stat. 94, 98, 50 U.S.C.A.Appendix, §§ 1894(b), 1896(a), and (b), alleging that the defendant had demanded and received rents for the use and occupancy of certain controlled housing accommodations in excess of the maximum legal rents established for said accommodations under the applicable rent laws and regulations. The plaintiff asked for an injunction against future violation of the rent-control laws and regulations,¹ and for an order requiring the defendant to make restitution to his tenants of all rental overcharges resulting from the collection of sums in excess of the established maximum rents. Defendant answered and, for the reasons hereinafter discussed, denied plaintiff's right to the relief sought.

The pertinent facts are not in dispute. Defendant was, at all times material hereto, the landlord of some twenty-two housing accommodations located on the Oliver plat, Ironwood, Michigan, within the so-called Iron Mountain, Michigan, defense-rental area. On November 14, 1947, the defendant, being dissatisfied with the maximum legal rents then in force, petitioned the area rent director for an adjustment and increase of rents on said housing accommodations. On December 23, 1947, the area rent director filed an opinion or order denying defendant's petition for an adjustment and increase of the rents. Upon denial of his petition the defendant filed with the regional office of the housing expediter in Cleveland, Ohio an application for review of the area rent director's decision. On February 6, 1948, the regional office, after full investigation, entered an order signed by the regional rent administrator, granting defendant's petition for review, reversing the opinion or order of the area rent director, and increasing the maximum legal rents on the defendant's housing accommodations. In reliance upon this order of February 6th, the defendant thereupon proceeded to collect the increased rates of rental. However, on June 3, 1948, the regional office in Cleveland, without giving defendant notice or the opportunity for a hearing, entered an order signed by the regional housing expediter,² revoking the prior order of February 6, 1948, which had granted defendant an increase in the maximum rents. The order of June 3, 1948, reads in part as follows:

"On February 2 6, 1948, the regional rent administrator, upon consideration of an application for review filed by applicant, issued an order adjusting the maximum rent for subject accommodations as follows: * * *

"The regional housing expediter upon reconsideration of said application for review and determination finds that the maximum rent for said accommodations was erroneously increased for the following reasons: * * *

"By reason of the foregoing it is ordered that the orders issued by the regional rent administrator on February 2 6, 1948, adjusting rents for subject accommodations be and the same are hereby revoked. This order supersedes the order issued by the regional rent administrator on February 2 6, 1948.

"The maximum rent for the accommodations are the amounts allowable prior to November 14, 1947, under law and regulations then in force; the order of the (area) rent director issued on December 23, 1947, denying the adjustments is hereby affirmed."

Defendant received no notice of any kind from the Cleveland regional office of its intention to revoke its prior order of February 6, 1948. Section 840.12 of Revised Rent Procedural Regulation No. 1 dated May 1, 1948, provides in part as follows:

"An order entered by a Regional Housing Expediter upon an application for review shall be effective and binding until changed by further order and shall be final subject only to appeal as provided in § 840.14 and following of this part. An order entered by a Regional Housing Expediter upon an application for review may be revoked or modified at any time, Provided, however, Due notice of the intention so to revoke or modify was previously given to the applicant."

Defendant contends that since he received no notice of any intention to revoke the order of February 6, 1948, the order of the regional housing expediter issued on June 3, 1948, revoking the February 6th order, is void. Plaintiff admits that no such notice as required by the above-quoted regulation was given to defendant, but contends that, because defendant did not appeal from the order of June 3, 1948, to the housing expediter in Washington, D. C., as provided for in the rent regulations, he has not exhausted his administrative remedies and may not now question the validity of that order in this suit.

Revised Rent Procedural Regulation No. 1 dated May 1, 1948, provides means whereby a landlord who has obtained an adverse decision from an area rent director may appeal from such decision to the regional housing expediter (§§ 840.11-840.13). If dissatisfied with the decision of the regional housing expediter, the landlord may then appeal to the housing expediter in Washington, D. C. (§§ 840.14-840.34). In other words, for a landlord aggrieved by a determination of the area rent director, there is provided the right of administrative appeal from the area rent director to the regional housing expediter, and from him to the housing expediter in Washington. In the present case defendant pursued the first steps of this administrative remedy provided by the regulations but did not take the final step. Therefore, the question presented is whether the defendant, when sued in this court by the housing expediter to enforce the June 3, 1948, order of the regional housing expediter, may question the validity of that order, even though he has not exhausted the final step of his administrative remedy by appeal to the housing expediter in Washington. In considering this question, it should be kept in mind that the order of June 3d was summarily entered by the regional housing expediter without notice to defendant as required by § 840.12 of Revised Rent Procedural Regulation No. 1, hereinbefore quoted.

Plaintiff cites many cases in support of its claim that the defendant may not question the validity of the order of June 3, 1948, in the present suit, because he has not exhausted his administrative remedies, but a reading of those cases will disclose that none are in point. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834; Roupp v. Woods, 10 Cir., 176 F.2d 544; Abbet Holding Corporation v. Woods, Em. App., 1948, 167 F.2d 472; and Bowles v. Meyers, 4 Cir., 149 F.2d 440, cited by plaintiff, are all based on the Emergency Price Control Act of 1942, as amended, 50 U.S. C.A.Appendix, § 901 et seq. Those cases held that a landlord could not attack the validity of rent regulations or orders in a Federal district court, but the decisions in those cases were based squarely upon § 204(d) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A. Appendix, § 924(d), which provided in part as follows:

"The Emergency Court of Appeals, and the Supreme Court upon review of judgments and orders of the Emergency Court of Appeals, shall have exclusive jurisdiction to determine the validity of any regulation or order issued under section 2 of any price schedule effective in accordance with the provisions of section 206, and of any provision of any such regulation, order, or price schedule. Except as provided in this section, no court, Federal, State, or Territorial, shall have jurisdiction or power to consider the validity of any such regulation, order, or price schedule, or to stay, restrain, enjoin, or set aside, in whole or in part, any provision of this Act authorizing the issuance of such regulations or orders, or making effective any such price schedule, or any provision of any such regulation, order, or price schedule, or to restrain or enjoin the enforcement of any such provision."

Under the above-quoted section of the 1942 Act the power to pass on the validity of rent orders and regulations was vested exclusively in the Emergency Court of Appeals and in the Supreme Court of the United States upon review. However, the present suit is not based upon the Emergency Price Control Act of 1...