The opinion of the court was delivered by: GALSTON
Essentially similar motions are made in these proceedings to quash the Information in each case, in support of pleas in abatement, and for a hearing before a jury to determine whether a certain regulation of the Price Administrator is void and the issuance thereof a nullity.
In each case the charge is that the defendants unlawfully sold quantity of beef, or wholesale cuts, at prices higher than the maximum price established for such commodity by the revised Maximum Price Regulation, No. 169, issued by the Office of Price Administration, pursuant to the provisions of Secs. 4(a), 205(b) and 206, Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix § 901 et seq.
Supporting the application in the Nagle case is an affidavit of F. W. H. Adams, an attorney who appears for the defendants in that proceeding, from which it appears that the defendants seek to prove that the maximum prices fixed by Regulation No. 169 are not generally fair or equitable, and do not effect the purposes of the Price Control Act; that the maximum prices so fixed do not allow any margin whatsoever for processing of beef; that in fixing the prices for dressed beef and wholesale cuts, under the aforesaid regulation, the Administrator gave no consideration to a generally fair and equitable margin for processing as required by the amendment to the Price Control Act of October 2, 1942, 50 U.S.C.A. Appendix § 963.
The Adams affidavit alleges that Regulation No. 169 fixes the following prices per 100 lbs. for the following grades of dressed beef in this zone:
AA A B C
$23,50 22.50 20.50 18.50
and that those prices, according to the Administrator's statement of considerations involved in the issuance of Regulation No. 169, were based on the following average live cattle costs at Chicago of the following grades:
AA A B C
$15.80 14.50 12.70 10.80
It is alleged that actually the prices for live cattle at Chicago at the time of the issuance of Regulation No. 169 were higher than the arbitrary prices selected by the Administrator, and moreover that such prices have consistently risen since the issuance of that regulation. There is included in the affidavit a table which shows that the cost of such live cattle at Chicago during the period from December 12, 1942 through May 14, 1943, dressed to the slaughterer in New York after processing, and including all reasonable and allowable costs and credits, is actually in excess of costs over maximum prices under the regulation as follows, for each of the four grades, all figures per hundredweight:
Cost in N.Y. Processing
Average Live dressed, over Maximum price over maximum
Grade Cost costs & grades under Reg. 169 price
AA $17.02 $28.58 $23.50 $5.08
A 16.18 28.26 22.50 5.76
B 14.44 26.99 20.50 6.49
C 12.65 25.45 18.50 6.95
It is contended that the foregoing are provable facts and that in consequence, since no fair and equitable margin was allowed to the defendants as processors, the action of the Administrator was capricious and arbitrary and that the regulation is illegal and void. It is also contended that the defendants have the right, and that this court has the jurisdiction, to determine by jury trial whether any valid regulation in fact exists.It is argued that the matter is not one of administrative error in judgment in arriving at a conclusion within the frame-work of statutory authority, but that it is an instance in which the Administrator has seen fit to disregard the statute. Reliance is had on United States v. United Verde Copper Co., 196 U.S. 207, 25 S. Ct. 222, 49 L. Ed. 449; United States v. George, 228 U.S. 14, at page 22, 33 S. Ct. 412, at page 415, 57 L. Ed. 712; United States v. Eaton, 144 U.S. 677, 12 S. Ct. 764, 36 L. Ed. 591.
The basic question presented is whether this court has jurisdiction to pass upon the legality of the regulation in question.
The Emergency Price Control Act of 1942 was enacted Jan. 30, 1942. Its purposes, including the time limit and applicability, are defined in 50 U.S.C.A.Appendix § 901. It is therein said:
"(a) It is hereby declared to be in the interest of the national defense * * * necessary to the effective prosecution of the present war, and the purposes of this Act are, to stabilize prices * * *; to eliminate and prevent profiteering, hoarding, manipulation * * * resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, * * * from undue impairment of their standard of living * * *.
"(b) The privisions of this Act * * * shall terminate on June 30, 1944 * * *."
Sec. 921 of the Act relates to administration and creates the Office of Price Administration, and empowers the Administrator, as provided in subdivision (d) thereof, from time to time, to issue such regulations and orders as he may deem necessary or proper to carry out the purposes and provisions of the Act.
Sec. 923 governs procedure and has direct bearing on the question submitted by this application. It is therein provided that: " (a) Within a period of sixty days after the issuance of any regulation or order under Sec. 902 of the Act, or in the case of a price schedule, within a period of sixty days after the effective date thereof specified in Sec. 926 of this Appendix, any person subject to any provision of such regulation, order, or price schedule may, in accordance with regulations to be prescribed by the Administrator, file a protest specifically setting forth objections to any such provision and affidavits or other written evidence in support of such objections. At any time after the expiration of such sixty days, any persons subject to any provision of such regulation, order, or price schedule may file such a protest based solely on grounds arising after the expiration of such sixty days. * * * Within a reasonable time after the filing of any protest * * * but in no event more than thirty days after such filing or ninety days after the issuance of the regulation or order * * * the Administrator shall either grant or deny such protest in whole or in part, notice such protest for hearing, or provide an opportunity to present further evidence in connection therewith. In the event that the Administrator denies any such protest in whole or in part, he shall inform the protestant of the grounds upon which such decision is based, and of any economic data and other facts of which the Administrator has taken official notice."
Sec. 924 of the Emergency Act, 50 U.S.C.A.Appendix, is likewise important in the consideration of the merits of this application, for it provides for a review of the decision of the Administrator. In part the section recites:
"(a) Any person who is aggrieved by the denial or partial denial of his protest may, within thirty days * * * file a complaint with the Emergency Court of Appeals, created pursuant to subsection (c), specifying his objections and praying that the regulation, order * * * be enjoined. * * * Upon the filing of such complaint the court shall have exclusive jurisdiction to set aside such regulation, order, or price schedule, in whole or in part, to dismiss the complaint, or to remand the proceeding: * * *
"(b) No such regulation * * * shall be enjoined * * * unless the complainant establishes to the satisfaction of the court that the regulation * * * is not in accordance ...