Korach Bros. v. Clark

162 F.2d 1020, 1947 U.S. App. LEXIS 2222
CourtEmergency Court of Appeals
DecidedJuly 11, 1947
DocketNo. 332
StatusPublished
Cited by2 cases

This text of 162 F.2d 1020 (Korach Bros. v. Clark) is published on Counsel Stack Legal Research, covering Emergency Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Korach Bros. v. Clark, 162 F.2d 1020, 1947 U.S. App. LEXIS 2222 (eca 1947).

Opinion

MARIS, Chief Judge.

The complainant manufactures women’s outerwear garments, among them being misses’ and junior misses’ dresses in the $57 and $66 per dozen price lines. The Price Administrator asserted that by selling these two price lines the complainant had violated the provisions of Revised Maximum Price Regulation No. 287 — Manufacturers’ Prices for Women’s, Girls’, Children’s and Toddlers’ Outerwear Garments.1 Misses’ and junior misses’ dresses were classified as category 22 in Appendix A of Section 27 of RMPR 287. The complainant protested the regulation on May 24, 1945. On November 28, 1945 the Price [1021]*1021Administrator instituted an action for treble damages and for an injunction in the United Stales District Court, Northern District of Illinois, alleging, inter alia, that the complainant had made sales of commodities subject to RMPR 287 at prices in excess of the highest price lines prescribed by the regulation. This enforcement action which is concerned with sales made during the periods November 29, 1944, to November 28, 1945 and January 25, 1946 to November 10, 1946 is still pending. 2 The protest was denied March 28, 1946. The complaint now before us was filed in this court pursuant to Section 204(a) of the Emergency Price Control Act of 1942, 50 U.S.C. A.Appendix, § 924(a). The complainant then moved for and was granted leave to present additional evidence. The record was reopened and additional evidence was submitted by both the complainant and the Price Administrator. On December 9, 1946 the Price Administrator denied the protest upon reconsideration in the light of the additional evidence.

Section 15(a) of RMPR 287 provided that “No manufacturer shall deliver any garments in a selling price line higher than the highest selling price line listed for a garment of the same category number on his pricing chart in effect on the date of delivery.” The pricing chart to which reference is thus made was required by Section 1389.353(a) of Maximum Price Regulation 287,3 which was continued in substance by Section 3 of RMPR 287 and provided:

“§ 1389.353. Pricing of garments by manufacturers, except manufacturing-retailers and custom tailors — (a) Pricing chart. Before selling or delivering any garment priced under this regulation, the manufacturer must prepare a pricing chart containing:

“(1) A list of the category numbers delivered during March 1942.

“(2) A list of each of the ‘selling price lines’ delivered during March 1942, in each category number. * * * ”

“Selling price line” was defined in Section 7(a) of RMPR 287, as amended by Amendment No. 3,4 to read as follows: “(a) ‘Selling price line’ means the price at which a manufacturer first offered for sale to his general trade a style of garment on the occasion of its first cutting, and at which a number of garments equal to at least 5% of the number of garments contained in that cutting were delivered. On or before November 1, 1944, each seller who has a selling price line listed on his pricing chart which does not meet these requirements must amend his copy of the pricing chart by deleting such selling price line. Subsequent offers to sell, or sales, of the same style at higher or lower prices are not to be considered as establishing separate selling price lines. Selling prices which differ from the prices customarily established for the general trade because of discounts, allowances, or price differentials for different classes of purchasers do not constitute selling price lines. Sample sales or accommodation sales shall not be considered as establishing a selling price line.”

The complainant contends that it had established its right to the $57 and $66 per dozen selling price lines in compliance with the provisions of the regulation. It alleges that in August and September, 1941 it undertook the designing and planning of a line of women’s cotton and synthetic fibre dresses to sell at prices of $57 and $66 per dozen; that in August, 1941 it began the purchase of piece goods for fabrication into these price lines; that by December, 1941 it had prepared a budget in connection with the manufacture of these two price lines and appropriated $100,000 for this purpose; that prior to January, 1942 it had employed for these two price lines a special designer, pattern-maker and salesman and leased separate salesrooms for the sole purpose of [1022]*1022selling these two price lines; that between January 1, 1942 and the end of March, 1942 it had obtained and accepted bona fide uncancellable orders for these two price lines in excess of $100,000; that it began cutting of dresses in these two price lines on February 24, 1942 and that by March 30, 1942 it had cut many thousands of dozens of such dresses; that by March, 1942 it had spent in excess of $77,000 for piece goods purchased for this purpose; that when garments were delivered to the Chicago office they were ready for shipment to customers; that commencing about March 28, 1942 customers did select garments for filling orders previously placed and directed that they be packed and shipped to themselves; that by April 6, 1942 in excess of $9,500 of merchandise in the two price lines had been billed and shipped to customers and that bills to cover eighty customers were rendered on April 3, 1942; and by April 8, 1942 in excess of $13,000 of invoices were rendered to customers for merchandise delivered to them.

The complainant and the Price Administrator disagree as to whether these facts have been proved and the inferences to be drawn therefrom. We have no occasion to resolve this factual dispute, however, since it is a matter for the enforcement court to determine. Assuming, however, that the facts as alleged by the complainant have been proved the complainant and the Price Administrator also disagree as to whether they amount to compliance with the delivery requirements of RMPR 287 so as to entitle the complainant to sell in the two price lines with which we are concerned. Since the complainant contends that the Administrator’s interpretation of these requirements would render the regulation invalid it becomes necessary for us to examine the regulation to determine the ■correct meaning of its delivery requirements.

We must first, however, dispose of the contention that the highest price line limitation provision of the regulation renders the regulation invalid. Questions as to the validity of highest price line limitations have been before us in two previous cases. In Montgomery Ward & Co. v. Bowles, Em.App.1945, 147 F.2d 858, we held that it was within the statutory power of the Price Administrator to limit sellers to price lines no higher than the highest price lines in which they had dealt during the base period of March, 1942. We concluded, however, that Maximum Price Regulation 330, the regulation there under attack, was invalid as applied to retailers of women’s and children’s outerwear -garments because the requirement that a seller in order to establish his right to a given price line must have delivered a garment in that price line during March, 1942 resulted in discrimination among equals brought about by chance rather than by a scientific approach to price control. However, in Modern Manufacturing Co., Inc. v. Fleming, Em. App.1947, 160 F.2d 892

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Related

United States v. Hudspeth
78 F. Supp. 30 (W.D. Kentucky, 1948)
Korach Bros. v. Clark
165 F.2d 218 (Emergency Court of Appeals, 1947)

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Bluebook (online)
162 F.2d 1020, 1947 U.S. App. LEXIS 2222, Counsel Stack Legal Research, https://law.counselstack.com/opinion/korach-bros-v-clark-eca-1947.