Quitt v. Stone

39 F.2d 219, 1930 U.S. Dist. LEXIS 1959
CourtDistrict Court, D. Maryland
DecidedMarch 7, 1930
DocketNo. 1650
StatusPublished
Cited by1 cases

This text of 39 F.2d 219 (Quitt v. Stone) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quitt v. Stone, 39 F.2d 219, 1930 U.S. Dist. LEXIS 1959 (D. Md. 1930).

Opinion

COLEMAN, District Judge.

This is a proceeding to review the action of the local prohibition administrator at Baltimore in refusing to renew a permit for specially denatured alcohol.

On July 17, 1929, the complainant, Dr. William Quitt, a dentist, trading as the Three Flowers Chemical Company, with place of business in the city of Baltimore, applied to the local prohibition administrator for a renewal of his permit to withdraw, during the year 1930, 5,550 gallons per month of specially denatured alcohol. In 1925, complainant was first granted a permit to withdraw 200 gallons per month. The permit was renewed from year to year, the amount allowed to be withdrawn being increased until, in 1927, it reached the amount sought for in the present controversy. . These successive permits stated on their face that the withdrawals were for use in the manufacture of various specified toilet preparations or extracts, such .manufacture to be according to formulas which were from time to time approved by the commissioner. The last permit, issued on January 28,1929, contained the express provision that it was “issued subject to any [221]*221change in formula? in preparations which the Bureau may require,” and that "permittee will make further modification of his formuIeb for Bose Extract set forth on the face hereof which the Bureau may require after due, notice in the event it be found said preparation is used contrary to the law or regulations.” On December 9, 1929, the local administrator notified complainant in writing, that submission of new and better quality of oil and new formulae would have to be made before favorable action could be taken on his application for a permit for 1930. This the complainant refused to do, whereupon, on December 24, 1929, the local administrator advised the complainant in writing that his application was disapproved, giving, as his reasons that complainant had not in good faith complied with the National Prohibition Aet, with the regulations pursuant thereto, nor with the terms of his permit in that, as the administrator’s investigations disclosed, there was no proof of legitimate need, use, or disposition of complainant’s product as such; that he had disposed of it under circumstances from which any reasonable person might deduce its intended unlawful use, and that all of the purchasers of complainant’s product had obstructed the government in its investigation of the ultimate uses and disposition thereof. The refusal notice also stated that a hearing would be afforded if desired. Thereupon, complainant filed a bill in this court praying that the aetion of the local administrator in refusing a permit for 1930, as aforesaid, was arbitrary and contrary to law, sought a review of his aetion, and asked that his findings be reversed, and the permit be granted. The local administrator defended his aetion in an answer to'the bill, and on January 2, 1930, as a result of a hearing, this court decided that the National Prohibition Aet (title 2, § 9, 41 Stat. 311, 27 US CA § 21) made a hearing before the commissioner or local administrator, a condition precedent to any aetion by this court, for otherwise there was no record of any proceedings which the court could review. Therefore, the case was remanded to the local administrator, stipulating that a hearing should be granted within fifteen days. Because of the fact that the local administrator, although he had originally offered to grant a hearing, failed to do so in full compliance with the terms of the law, namely, it was not until December 24th that he announced his decision and therefore the minimum fifteen days notice prior to a hearing could not be granted without overlapping into the year for which the permit was sought, the court further ruled that, pending such hearing and decision thereon by the local administrator, complainant’s permit for 1929 would be considered as still in effect. In passing such order, however, the court expressly stated that the same was not to be construed as a determination of the question as to whether the complainant’s permit was, as he contended, a basic permit, and not terminated by lapse of time every twelve months, or whether, as the government contended, it was so terminated.

In accordance with the aforegoing order, the local administrator granted a hearing on January 14, 1930, presided over by a hearer in accordance with the law and the regulations, which consumed nine days, and at which a great amount of testimony was taken and lengthy arguments were made. On February 8th, the hearer rendered his findings confirming the findings and recommendations previously issued by his office, that complainant’s permit should not be renewed, and summarized his reasons as follows: “first, that there is no legitimate demand for the product manufactured by the complainant and that the demand he has been supplying is not a legitimate demand; second, that the admitted facts in the case cannot be reconciled with good faith as it is contemplated in carrying out the provisions of the National Prohibition Aet; third, that the information in the possession of the administrator on December 24th, 1929, was more than sufficient to justify the belief that this product was being diverted to beverage use; fourth, that the permit operation of the complainant is not one that is contemplated by the law and regulations, but is directly contrary to the true intent of the statute, in that the product is not manufactured and prepared for the market as required by section 4, title 2 of the National Prohibition Aet and the regulations promulgated thereunder.” These findings and recommendations were approved by the local administrator. Complainant thereupon renewed his application for a review of the local administrator’s action by bill of complaint similar to the one originally filed, and it was upon this bill and the government’s answer thereto that the present hearing was had.

At the beginning, it is necessary to point out that in a proceeding of this kind this court is controlled by two fundamental principles: (1) that no one has a vested right to purchase and use liquor even for lawful purposes, and correspondingly, no one has a vested right to obtain a permit therefor on his mere demand, the dominant purpose of the aet being to prevent the use of intoxi[222]*222eating liquor as a beverage, and by its ex-! press declaration all of its provisions are to be liberally construed to this end; (2) that tbe discretion of tbe local administrator -is final and conclusive, and not subject to judicial review, unless Ms decision is wholly unsupported by the evidence, or is wholly dependent' upon a question of law, or is arbitrary or capricious; and therefore the court, in reviewing the commissioner’s action, is not granting a hearing de novo or even a hearing supplemental .to the commissioner’s action. Ma-King Products Co. v. Blair, 271 U. S. 479, 46 S. Ct. 544, 70 L. Ed. 1046; Yudelson v. Andrews (C. C. A.) 25 F.(2d) 80; Herbert v. Anstine (C. C. A. 4th Circuit) 37 F.(2d) 552.

The government took the position that complainant was in the same situation as would be a new applicant for a permit, which position the hearer held to be correct, and therefore overruled a motion made by complainant, that complainant’s prior permit constituted a vested right in him which could not be taken away except by citation and proof of a violation of some provision of the National Prohibition Act or regulation promulgated pursuant thereto; in short, that the burden of proof was upon the government in the first instance, just as it would be in a case where the government seeks to revolee a permit.

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45 F.2d 846 (D. Maryland, 1930)

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Bluebook (online)
39 F.2d 219, 1930 U.S. Dist. LEXIS 1959, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quitt-v-stone-mdd-1930.