MARIS, Circuit Judge.
This is an appeal by the defendant, James W. S. Davis, supervisor in charge in Puerto Rico of the Alcohol and Tobacco Tax Division of the Federal Internal Revenue Service, from a judgment entered in the District Court for the District of Puerto Rico determining that the
Regulations
issued under the Federal Alcohol Administration Act
respecting standards of fill for wine are not applicable in the Commonwealth of Puerto Rico insofar as concerns wine bottled within the Commonwealth for sale, distribution and consumption there. The judgment was entered in an action brought by the plaintiff, Trigo Bros. Packing Corp., naming as defendants, George M. Humphrey, then Secretary of the United States Treasury Department, Dwight E. Avis, Director of the Alcohol and Tobacco Tax Division of the Internal Revenue Service, and James W. S. Davis, the local supervisor. Service was had only upon defendant Davis.
The complaint asserted, as a first cause of action, that the plaintiff, a Puerto Rican corporation bottled imitation raisin wines in Puerto Rico in bottles having a capacity of 12 ounces, a size not included in the standards of fill provisions contained in the Regulations,
which were promulgated pursuant to section 5(e) of the Federal Alcohol Administration Act, as amended.
It was further alleged that as a result of the
change in the status of Puerto Rico the bottling of wine in that island for sale and consumption there is not the sale, shipment or delivery thereof in interstate commerce and, consequently, the standards of fill provisions of the Regulations are inapplicable and the plaintiff may lawfully bottle its wine in containers of any size which may be approved by the local authorities. The complaint further asserted that the defendants, nevertheless, have taken the position that interstate commerce, since it is defined in section 17(a)
as including commerce within Puerto Rico, includes the bottling of wine for local sale and consumption, and that if plaintiff should bottle wine in containers other than those specified in the Regulations, it would become liable to revocation of the basic permit which had been issued to it under section 4,
by reason of such noncompliance with section 5(e),
as well as to sanctions imposed under section 7.
In a second cause of action it was asserted that by reason of section 9 of the Puerto Rican Federal Relations Act
the bottling of wine for sale and consumption within the Commonwealth is not a sale or shipment in interstate commerce. The plaintiff, therefore, prayed for a declaratory judgment that the Federal Alcohol Administration Act is not applicable in the Commonwealth, insofar as the Wine Regulations are concerned, as to such wine bottled in the Commonwealth for local sale and consumption and it also sought injunctive relief pendente lite.
The defendants moved for dismissal of the complaint on two grounds: first, that the court lacked jurisdiction over Secretary Humphrey and Director Avis,
and, second, that the complaint failed to state a claim upon which relief could be granted. The motion was denied, the district court holding that Director Avis was not an indispensable party since a decree against defendant Davis granting the relief sought would not require Director Avis to take any affirmative action, either directly or indirectly, but would put an end to the matter. The court further held that the plaintiff had exhausted the administrative remedies open to it. The action proceeded against defendant Davis as the sole defendant, Secretary Humphrey and Director Avis not having been served with process. Thereafter, the parties having waived the filing of further pleadings or memoranda, the district court entered a final judgment declaring that the Wine- Regulations respecting the fill of containers issued under the Act are not applicable in the Commonwealth in respect to wine bottled for local sale, distribution and consumption. 159 F.Supp. 841. This appeal followed.
The question which this appeal presents at the outset is whether the Director
was a necessary party to this litigation. For if he was a necessary party his absence deprived the district court of power to deal with the case and it should have been dismissed without considering its merits.
The test for determining whether a superior officer is an indispensable party has been formulated by the Supreme Court in Williams v. Fanning, 1947, 332 U.S. 490, 68 S.Ct. 188, 92 L.Ed. 95. In that case the petitioners sought to enjoin a local postmaster from carrying out a fraud order issued by the Postmaster General directing the local postmaster to refuse payment of money orders drawn to petitioners’ order or to deliver mail to them. The Supreme Court held that the Postmaster General was not an indispensable party to such an action because it was the local postmaster who did the acts of which the petitioners complained. A distinction was drawn between the line of cases
in which an injunction issued to a local officer resulted in affording the petitioners the relief sought, viz., by putting an end to the matter, and those cases
which “evolved the principle that the superior officer is an indispensable party if the decree granting relief sought will require him to take action, either by exercising directly a power lodged in him or by having a subordinate exercise it for him.” [332 U.S. 490, 493, 68 S.Ct. 188, 189, 92 L.Ed. 95.]
In considering this question we may assume arguendo, without deciding, that the plaintiff is right in one or both of the contentions it makes, namely, that under the authority of Bacardi Corp. v. Domenech, 1940, 311 U.S. 150, 167-168, 61 S.Ct. 219, 85 L.Ed. 98, Puerto Rico may prescribe standards of fill for wine bottled for local use in sizes not permitted by the Director’s Regulations, or that the changed status of Puerto Rico as
a Commonwealth has rendered obsolete and no longer effective the statutory definitions under which intrastate commerce within Puerto Rico was to be treated as interstate commerce for the purposes of the Act.
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MARIS, Circuit Judge.
This is an appeal by the defendant, James W. S. Davis, supervisor in charge in Puerto Rico of the Alcohol and Tobacco Tax Division of the Federal Internal Revenue Service, from a judgment entered in the District Court for the District of Puerto Rico determining that the
Regulations
issued under the Federal Alcohol Administration Act
respecting standards of fill for wine are not applicable in the Commonwealth of Puerto Rico insofar as concerns wine bottled within the Commonwealth for sale, distribution and consumption there. The judgment was entered in an action brought by the plaintiff, Trigo Bros. Packing Corp., naming as defendants, George M. Humphrey, then Secretary of the United States Treasury Department, Dwight E. Avis, Director of the Alcohol and Tobacco Tax Division of the Internal Revenue Service, and James W. S. Davis, the local supervisor. Service was had only upon defendant Davis.
The complaint asserted, as a first cause of action, that the plaintiff, a Puerto Rican corporation bottled imitation raisin wines in Puerto Rico in bottles having a capacity of 12 ounces, a size not included in the standards of fill provisions contained in the Regulations,
which were promulgated pursuant to section 5(e) of the Federal Alcohol Administration Act, as amended.
It was further alleged that as a result of the
change in the status of Puerto Rico the bottling of wine in that island for sale and consumption there is not the sale, shipment or delivery thereof in interstate commerce and, consequently, the standards of fill provisions of the Regulations are inapplicable and the plaintiff may lawfully bottle its wine in containers of any size which may be approved by the local authorities. The complaint further asserted that the defendants, nevertheless, have taken the position that interstate commerce, since it is defined in section 17(a)
as including commerce within Puerto Rico, includes the bottling of wine for local sale and consumption, and that if plaintiff should bottle wine in containers other than those specified in the Regulations, it would become liable to revocation of the basic permit which had been issued to it under section 4,
by reason of such noncompliance with section 5(e),
as well as to sanctions imposed under section 7.
In a second cause of action it was asserted that by reason of section 9 of the Puerto Rican Federal Relations Act
the bottling of wine for sale and consumption within the Commonwealth is not a sale or shipment in interstate commerce. The plaintiff, therefore, prayed for a declaratory judgment that the Federal Alcohol Administration Act is not applicable in the Commonwealth, insofar as the Wine Regulations are concerned, as to such wine bottled in the Commonwealth for local sale and consumption and it also sought injunctive relief pendente lite.
The defendants moved for dismissal of the complaint on two grounds: first, that the court lacked jurisdiction over Secretary Humphrey and Director Avis,
and, second, that the complaint failed to state a claim upon which relief could be granted. The motion was denied, the district court holding that Director Avis was not an indispensable party since a decree against defendant Davis granting the relief sought would not require Director Avis to take any affirmative action, either directly or indirectly, but would put an end to the matter. The court further held that the plaintiff had exhausted the administrative remedies open to it. The action proceeded against defendant Davis as the sole defendant, Secretary Humphrey and Director Avis not having been served with process. Thereafter, the parties having waived the filing of further pleadings or memoranda, the district court entered a final judgment declaring that the Wine- Regulations respecting the fill of containers issued under the Act are not applicable in the Commonwealth in respect to wine bottled for local sale, distribution and consumption. 159 F.Supp. 841. This appeal followed.
The question which this appeal presents at the outset is whether the Director
was a necessary party to this litigation. For if he was a necessary party his absence deprived the district court of power to deal with the case and it should have been dismissed without considering its merits.
The test for determining whether a superior officer is an indispensable party has been formulated by the Supreme Court in Williams v. Fanning, 1947, 332 U.S. 490, 68 S.Ct. 188, 92 L.Ed. 95. In that case the petitioners sought to enjoin a local postmaster from carrying out a fraud order issued by the Postmaster General directing the local postmaster to refuse payment of money orders drawn to petitioners’ order or to deliver mail to them. The Supreme Court held that the Postmaster General was not an indispensable party to such an action because it was the local postmaster who did the acts of which the petitioners complained. A distinction was drawn between the line of cases
in which an injunction issued to a local officer resulted in affording the petitioners the relief sought, viz., by putting an end to the matter, and those cases
which “evolved the principle that the superior officer is an indispensable party if the decree granting relief sought will require him to take action, either by exercising directly a power lodged in him or by having a subordinate exercise it for him.” [332 U.S. 490, 493, 68 S.Ct. 188, 189, 92 L.Ed. 95.]
In considering this question we may assume arguendo, without deciding, that the plaintiff is right in one or both of the contentions it makes, namely, that under the authority of Bacardi Corp. v. Domenech, 1940, 311 U.S. 150, 167-168, 61 S.Ct. 219, 85 L.Ed. 98, Puerto Rico may prescribe standards of fill for wine bottled for local use in sizes not permitted by the Director’s Regulations, or that the changed status of Puerto Rico as
a Commonwealth has rendered obsolete and no longer effective the statutory definitions under which intrastate commerce within Puerto Rico was to be treated as interstate commerce for the purposes of the Act.
Nonetheless we are faced with the fact conceded by the plaintiff that the provisions of the Act which require all bottlers, including those engaged solely in intrastate bottling, to obtain a basic permit to engage in their business are just as valid and enforceable in Puerto Rico as they are everywhere else in the United States. For their validity in this regard has been fully upheld.
The validity of these provisions as to intrastate commerce is, of course, saved by the provision of the Act which gives a bottler the right to obtain a certificate of exemption with respect to purely intrastate activities if he establishes to the satisfaction of the Director
that his proposed activities are of that character. It is clear, however, that under the provisions of the Act, as amended, an exemption certificate is obtainable only from the Director. Defendant Davis has no authority to issue it. It is equally clear that unless a permittee possesses such an exemption certificate he remains subject to all the penalties of the Act if he fails to comply with the Director’s Regulations. Also, in that situation he is guilty of a misdemeanor. Likewise, all internal revenue and customs officers are enjoined by the express language of the statute from permitting him to carry on such business. When and as he secures a certificate of exemption from the Director, but not until then, all this is changed and he may proceed with the conduct of his business without hindrance. It follows that the officer from whom the plaintiff must obtain relief, if plaintiff is to have it, is the Director of the Alcohol and Tobacco Tax Division in Washington. It is obvious that an injunction against the supervisor in Puerto Rico, the only defendant before the court in this suit, would not afford plaintiff the relief it seeks. For such an injunction could not direct the issuance of the necessary certificate of exemption, nor vacate the Director’s denial of such a certificate, nor would it render the plaintiff immune from prosecution by the Attorney General
as a violator of the Act or stay the hands of the various customs and internal revenue officers who, in the absence of a certificate of exemption, are expressly required by the statute to prevent plaintiff from carrying on its business. It will thus be seen that the case is clearly distinguishable from Williams v. Fanning. Accordingly, we conclude
that Director Avis, who was not served within the District and was not before the district court, was a necessary party to the litigation.
The Director’s denial of an exemption certificate is, of course, subject to judicial review under section 5(e) of the Act which provides that “The District Courts of the United States, and the United States court for any Territory shall have jurisdiction of suits to enjoin, annul, or suspend in whole or in part any final action by the Secretary upon any application under this subsection.”
But this provision merely gave to the district courts jurisdiction of the subject matter. It did not purport to, nor did it, amend the federal venue statute which requires that a suit in which jurisdiction is not founded solely on diversity of citizenship shall “be brought only in the judicial district where all defendants reside.”
Nor did it purport to authorize service upon the Director outside the district in which the suit was brought or authorize service upon any officer in the District of Puerto Rico as agent for the Director. Such an amendment was suggested to the Congress while the Act was under consideration
but it was not included in the Act as passed. Accordingly, the Act conferred upon the District Court for the District of Puerto Rico jurisdiction of the suit against Director Avis only if the Director had waived the venue and had submitted himself to the jurisdiction of the district court. It is argued that the procedure prescribed by the Act imposes a burden upon the plaintiff but if so its correction is a matter for the Congress rather than the courts.
A judgment will be entered vacating the judgment of the district court and remanding the cause with directions to dismiss the complaint for want of a necessary party defendant.