Source: https://openjurist.org/232/f2d/155/united-states-v-dix-box-co
Timestamp: 2019-04-22 14:01:56+00:00

Document:
Nos. 14432 (and consolidated cases Nos. 14432-14440 and Nos.
Warren E. Burger, Asst. Atty. Gen., John J. Cound, Samuel D. Slade, Attorneys, Department of Justice, Washington, D.C., Laughlin E. Waters, U.S. Atty., Max F. Deutz, James R. Dooley, Asst. U.S. Attys., Los Angeles, Cal., for appellant.
Richard Allan Weiss, Los Angeles, Cal., for appellee Helen Carvajal.
Lillie & Bryant, Walter M. Campbell, Jr., Los Angeles, Cal., for other appellees.
This is an appeal from a judgment of the District Court for the Southern District of California, Central Division, in favor of appellees in an action for damages instituted by the United States against each of the defendant-appellees here involved for violation of Ceiling Price Regulation 142 during the period May 5, 1952, and January 31, 1953.1 Ceiling Price Regulation 142 was issued under the authority of the Defense Production Act of 1950, as amended, 50 U.S.C.A.Appendix, § 2061 et seq.
The business of the appellees was subject to seasonal variation, and this base period fell within a slack season. The appellees filed a protest with the Office of Price Stabilization in Washington, D.C., complaining that the prices which they had obtained during this base period did not properly reflect their business. In consequence, the O.P.S. pursuant to the General Ceiling Price Regulation, issued Order L-117 on June 28, 1951, setting revised ceiling prices for certain of the goods sold by the appellees. The testimony of the appellees was that the net effect of Order L-117 was to enable them to operate at a reasonable profit once again.
On April 29, 1952, the O.P.S. issued Ceiling Price Regulation No. 142,4 which superseded the General Ceiling Price Regulation with respect to the transactions covered, and established new ceiling upon both the prices which the appellees might charge and the prices which the retailers who sold them to them might receive. Shortly thereafter, five of the appellees, acting as representatives of all, had various discussions and meetings with officials of the Los Angeles office of the O.P.S., extending over the entire period in question. It was the position of the appellees during these meetings, that the result of C.P.R. 142 was to make it unprofitable for them to continue in business.
The trial court found that at each of these meetings there was agreement between the O.P.S. officials and the appellees that the prices established by C.P.R. 142 resulted in lowering the margin of gross profit to the dealer to such an extent that it would require operation at a net loss and that the Los Angeles office would make the necessary investigations and recommendations to Washington to have the regulation amended. The appellees were informed that it might be helpful but would be necessary for them to hire attorneys.
The appellees stated to the Los Angeles officials that they would continue to operate under Order L-117 rather than C.P.R. 142, and in fact did so operate. Two of the appellees testified that they had not been told they could continue under L-117 and that they likewise had not been told they could not. There was no written permission given by the officials to the appellees to continue to operate under L-117 rather than C.P.R. 142. However, one of the officials admitted in the trial court that he said in response to a query from one of the appellees as to the effect of C.P.R. 142, something like 'Don't worry about it, there aren't enough handcuffs to put you all in jail, we aren't going to put you in jail, and we'll see what we can do about getting it straightened out for you.' One appellee testified that he was told that 'it was all right to use L-117', but was unable to state whom it was who told him. At no time did the O.P.S. prior to the filing of the complaint by the government inform the appellees that they were going to be prosecuted.
(1) Ceiling Price Regulation No. 142 was void and of no force and effect whatsoever by reason of the fact that the regulation was arbitrary and that no effort was made by the Office of Price Stabilization to comply with the provisions of Title 50 U.S.C.A.Appendix, § 2104 in advising or consulting with members of the Industry with respect thereto.
(2) That the President of the United States and those to whom he had delegated authority were estopped from enforcing the provisions of Ceiling Price Regulation 142 by reason of the conduct, promises, expressed and implied, by said officials.
(3) The court found in favor of appellee Carvajal for the above two reasons and as well held that Carvajal was not a 'dealer' within the meaning of Section 12b of Ceiling Price Regulation 142 and thus was not covered by the regulation.
From that decision this appeal is taken.
First, that the district court was without power to declare C.P.R. 142 void and of no force and effect, because exclusive jurisdiction to determine the validity of such a regulation rests with the Emergency Court of Appeals, and on review therefrom, with the Supreme Court.
Second, that the President of the United States and those to whom he delegated authority under the Defense Production Act were not estopped from enforcing C.P.R. 142 by the alleged statements and actions of the Los Angeles representatives of the Office of Price Stabilization.
Third, as to appellee Carvajal, the United States argues that she was a 'dealer' within the general meaning and purpose of C.P.R. 142, and therefore subject to the regulation.
For cases construing this provision and like provisions see: United States v. Excel Packing Co., 10 Cir., 210 F.2d 596; Bowles v. American Brewery, Inc., 4 Cir., 146 F.2d 842 (CA 4); Bowles v. Wheeler, 9 Cir., 152 F.2d 34; Superior Packing Co. v. Porter, 8 Cir., 156 F.2d 193; Rosenweig v. United States, 9 Cir., 144 F.2d 30; United States v. Walton Motors, D.C., 114 F.Supp. 83.
Since the court, without jurisdiction, declared the operative regulation void and held that the President and his delegates were estopped from enforcing it, and proceeded to decide the issues in the case upon those clearly erroneous rulings, it is unnecessary for us to go further.
Perhaps the rank unfairness of the action swayed the trial judge, and we add, with emphasis, that the advisability of further maintaining the case in court should be very seriously considered by the Attorney General of the United States.
2 64 Stat. 798, 50 U.S.C.A.Appendix, § 2061 et seq.
3 16 F.R. 808 (Jan. 30, 1951); 5424 (June 8, 1951).

References: § 2061
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 § 2061