Bowles v. California Scrap Iron Corp.

53 F. Supp. 40, 1943 U.S. Dist. LEXIS 1845
CourtDistrict Court, N.D. California
DecidedNovember 26, 1943
DocketNo. 22530-G
StatusPublished

This text of 53 F. Supp. 40 (Bowles v. California Scrap Iron Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bowles v. California Scrap Iron Corp., 53 F. Supp. 40, 1943 U.S. Dist. LEXIS 1845 (N.D. Cal. 1943).

Opinion

GOODMAN, District Judge.

By his complaint, the Price Administrator charges the defendant corporation with certain violations of the Emergency Price Control Act of 1942, Public Law 421, 77th Congress, 2nd Session, 56 Stat. 23, 50 U.S.C.A.Appendix, § 901 et seq.

Specifically, it is claimed that defendant infracted price schedule No. 4, iron and steel, as amended (7 Fed. Register 1207). In this schedule, plaintiff established maximum prices for various grades of iron and steel scrap.

In its answer, defendant denied specifically the charge that it exceeded the established maximum prices and alleged that “while technical violations * * * might [41]*41have occurred, the same were not wilful and intentional, if so committed the same were due to confusion, lack of understanding, conflicting interpretations of the provisions * * * and have long since discontinued * * *.”

Evidence was presented on behalf of the Administrator in proof of the following alleged infractions by the defendant:

1. Offers of and deliveries of up-graded scrap to Columbia Steel Company in violation of Section 1304.13(a) (8).

2. Billing of weighing charges to General Metals Corporation, contra to Sections 1304.1, 1304.6(a) 2 and 1304.7.

.3. Excess local truck transportation charges covering cast iron scrap to five consumers, contra to Section 1304.15.

4. Unlawful billing to General Metals Corporation of transportation charges, in the absence of trucking service, contra to Section 1304.15(b) (2) (iii).

5. Excess trucking charges to General Metals Corporation, contra to section 1304.-15(b) (2) (ii).

6. Unlawful collection of brokerage commissions upon sales of scrap’ originating from Del Paso Iron & Metal Company, contra to Section 1304.6.

7. Payment of illegal commissions in transactions with Associated Oil Company, contra to Section 1304.6(a).

8. Failure to keep proper records, contra to Section 1304.15(b) (2) (iii).

No evidence was presented showing that defendant intended to further violate the applicable regulations nor is there any evidence from which such an inference may be drawn.

It is clear to me from the evidence that the infractions committed by the defendant were neither intentional nor in bad faith. The officers of defendant testified, and it is not controverted, that they have been devoting themselves in aid of the government's program to accumulate and conserve scrap metal to further the war effort, and are now, and have been at all times since the last infraction charged, (which occurred almost five months prior to the commencement of this action) in good faith adhering to the Price Control Act and the Regulations and schedules promulgated by the Administrator pursuant thereto.

Under these circumstances, the defendant contends that no reason for the issuance of an injunction appears; that equity does not require, nor is it requisite under the statute, that defendant be enjoined from committing acts which the evidence shows are not likely to occur in the future.

Section 205(a) of the Emergency Price Control Act provides: “Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, * * * he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.”

Plaintiff contends that, regardless of equitable considerations, it is mandatory on the part of the court to issue an injunction upon proof of infractions, irrespective of the time or nature of the infractions and without the necessity of any evidence of an intention to commit further infractions.

If the rules of equity were controlling, the court would not grant an injunction in this case. However, the statute, with which we are here concerned, was in fact enacted by Congress as a war measure. “It is a police regulation of great scope and importance.” Brown v. Hecht Co., infra. It is beyond question that the Congress considered the battle against inflation as important to the success of the present war as military and naval action. A breakdown in civilian economy appeared to the Congress to be as great a danger to national security as military or naval attack upon this country itself. It is well stated in the majority opinion in Brown v. Hecht Co., App.D.C., 137 F.2d 689, 694: “When Congress passed the Emergency Price Control Act it realized that there was an emergency. It knew that the war was producing and would produce prodigious increases in public expenditures and private purchasing power together with a dearth of many things for which buyers compete. It knew that unless effective price control was achieved, these conditions would force up prices and then wages to meet prices and then prices to meet wages, until and even after inflation became fantastic. It realized that, as the Senate Committee said, ‘of all [42]*42the consequences of war, except human slaughter, inflation is the most destructive. * * * Rising prices and increases in the cost of living bring misery to our people, cause industrial unrest, and undermine our unity. * * * Living costs tend to rise more quickly than wages, (and) the burdens of war are haphazardly distributed, with the heaviest burden on the farmer, the salaried worker, the small investor, the pensioner, and the veteran, whose incomes cannot readily be expended. Rising living costs mean labor disputes and spiraling wage demands. And the suspicion of profiteering causes discontent which hampers production as surely as the bombing of factories. Rising prices now foreshadow * * * deflation later with attendant depression and suffering. Such prospects and fears * * * sap energy and morale now. Rising prices limit production. For price uncertainties prevent future planning and long-term commitments which are an integral part of the industrial process. * * * Rising prices inevitably increase the cost of the defense program.’ ”

By the Constitution there were committed to the Congress certain extraordinary powers in the event of war. Of necessity, the exercise of such powers is drastic, and dictatorial. The preservation of the country and of the Constitution itself is at stake. Statutes passed pursuant to this power and authority cannot be measured by the same standards as determine the validity of peacetime legislation. In their nature, they must be harsh and call for summary and drastic enforcement, else there would be nothing to administer in time of peace. The Senate Committee, which reported the Act, stated that the program (i.e. anti-inflation program) “is now unlimited national mobilization in a war for survival.” Senate Rep. No. 931, 77th Congress 2nd Sess. (1942). Some District Courts have held that it is mandatory upon the part of the court under the instant statute to issue an injunction; others have held contrariwise. The United States Court of Appeals for the District of Columbia in the case of Brown v.

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Related

Brown v. Hecht Co.
137 F.2d 689 (D.C. Circuit, 1943)
Henderson v. C. Thomas Stores, Inc.
48 F. Supp. 295 (D. Minnesota, 1942)

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Bluebook (online)
53 F. Supp. 40, 1943 U.S. Dist. LEXIS 1845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bowles-v-california-scrap-iron-corp-cand-1943.