Duryea v. Riley

67 F. Supp. 680, 1946 U.S. Dist. LEXIS 2209
CourtDistrict Court, N.D. Illinois
DecidedJune 18, 1946
DocketNo. 46 C 352
StatusPublished

This text of 67 F. Supp. 680 (Duryea v. Riley) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duryea v. Riley, 67 F. Supp. 680, 1946 U.S. Dist. LEXIS 2209 (N.D. Ill. 1946).

Opinion

SULLIVAN, District Judge.

The complaint in this case alleges that plaintiffs bring the action to obtain an injunction to prevent defendants from reducing their just and lawful allocation of sugar under Ration Order No. 3, as amended, and for a declaratory judgment to determine whether defendants were in error in refusing to grant plaintiffs an increase of their sugar base under said Ration Order. The complaint sets out that jurisdiction is conferred upon this Court by Section 205(g) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A. Appendix, § 925(g), and pursuant to Sec. 274d of the Judicial Code, 28 U.S.C.A. § 400.

The affidavit of L. N. Duryea, in support of motion for preliminary injunction, sets out that L. N. Duryea and David F. Hoy, two of the plaintiffs, acquired the machinery, equipment, raw materials, supplies and good will of the Criswell Candy Company on January 6, 1941. Due to the fact that Mr. Criswell had been ill, the company’s operations were far below normal at the time it was taken over by Duryea and Hoy, consequently the first six months of operation by the new corporation were at only about 10% of the capacity of the ma[681]*681chinery and equipment which had been acquired. During April 1942 the Office of Price Administration promulgated Ration Order No. 3 for the rationing of sugar. The regulations provided that the year 1941 should be considered the base year, and the use of sugar by an industrial user during that year should determine his base. Under this criterion plaintiffs, who manufactured high quality low-priced candy, were entitled to a base of 73,860 pounds in the first quarter from January 1 to March 31, and a base of 69,100 pounds for the second quarter from April 1st to June 30th. In contrast to the first and second quarters, the sugar used in the third quarter was nearly three times as great as the second quarter, being 183,900 pounds, and the fourth quarter was even greater, being 200,650 pounds, and that the last two quarters reflected a more normal operation and use of plaintiff’s facilities. In May, 1943, plaintiffs Duryea and Hoy requested defendant E. Worthington Walters to undertake the job of sales manager for the new corporation, but he was only willing to do this upon the condition that he be given an interest in the company, whereupon a partnership was formed in which Walters was given a 10% interest, the partnership doing business as The King Cole Company, Duryea and Hoy retaining a 90% interest therein. February 8, 1944, plaintiffs filed an application with the Washington Office of Price Administration for an increase in their annual sugar base, and on March 16, 1944, their base was increased from 527,500 pounds to 601,123 pounds. On various dates thereafter plaintiffs requested reconsideration of what they considered was a wholly inadequate increase. Plaintiffs were informed that because of the change of King Cole 'Candies Co., Inc., to King Cole Company, a partnership, no adjustment could be made because of a policy requiring that no adjustment of base be made where the. establishment had been transferred from one owner to another; but plaintiffs claim that no such policy has ever been set forth in Ration Order No. 3 or in any other order or regulation. On October 8, 1945, plaintiffs were informed that a change in this policy was contemplated and they thereupon requested a reconsideration of their application. In connection therewith the Washington Office of Price Administration asked for certain detailed information in order that full and fair consideration might be. given plaintiffs’ application for an increased sugar base. On February 21, 1946, without giving plaintiffs an opportunity to be heard on their request lor increase in their sugar base, L. Edward Knapp, Head,, industrial Petitions Section Sugar .Rationing Division in Washington, issued an order stating that the original increase granted to plaintiffs on March 16, 1944, was “erroneous” and that plaintiffs, instead of being entitled to an increase in their sugar base, had received an over-issue of sugar, and at the same time the District Office in Chicago was directed to determine the amount of “excess issuance” and to recapture the same.

Five days after the receipt of said order plaintiffs filed the complaint in this case and summons was served upon defendants, James Riley and Paul Porter.

February 26, 1946, plaintiffs filed their motion for a preliminary injunction. March, 194-6, and May, 1946, plaintiffs filed the affidavits oí E. Worthington Walters in support of the motion for preliminary injunction.

March 21, 1946, defendant Paul A. Porter filed his motion to dismiss and to quash service; and on the same date defendant James Riley filed his motion to dismiss the complaint and to dismiss the action for declaratory judgment.

Both motions set out that Paul Porter resides officially in the District of Columbia and that he can only be served at the place of his official residence; that he is an indispensable party to this proceeding, and if he cannot be served in this District then the action must be dismissed. The motions also allege that this action is one in effect against the United States which cannot be sued except with its consent. The. motion of James Riley also sets out that this proceeding docs not constitute an action to enjoin an order of suspension of an allocation pursuant to procedural regulation No. 4 issued by the Office of Price Administration.

[682]*682I shall decide first the question of whether or not the order here complained of is a suspension order, because if not then this court has no jurisdiction. Plaintiff says that the order is one for the withdrawal of an allocation granted some two years previously accompanied by a direction that there be a retroactive recapture of what is designated as an over-issue of sugar.

Plaintiffs insist that this order comes directly within the terms of Section 2(a) (9) of the Second War Powers Act, 50 U.S. C.A.Appendix, § 633, in that it falls within the description of “any order suspending any priority or allocation * * * that may have been issued by any person, officer, or agency, acting or purporting to act hereunder, or under any other law or authority.”

This court is first and primarily concerned with the question of whether it has jurisdiction to enjoin respondents from putting into effect the order in question.

By section 2(a) (2) of Title III of the Second War Powers Act the President was given authority to allocate certain materials and facilities, the Act also providing that (he President might exercise the power thus conferred upon him • through such department or agency of the Government as he might direct, and in conformity with such rules or regulations as he might prescribe. Pursuant to Executive Order, No. 9125, April 7, 1942, those powers were delegated by the President to the Chairman of the War Production Board who in turn delegated them to the Administrator of the Office of Price Administration which Office had been created under the Emergency Price Control Act of 1942, and it is an order of the Price Administrator which is here being considered.'

The jurisdiction of this court is invoked under Section 205(g), which reads as follows:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

L. P. Steuart & Bro., Inc. v. Bowles
322 U.S. 398 (Supreme Court, 1944)

Cite This Page — Counsel Stack

Bluebook (online)
67 F. Supp. 680, 1946 U.S. Dist. LEXIS 2209, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duryea-v-riley-ilnd-1946.