United States v. McCrillis

200 F.2d 884, 1952 U.S. App. LEXIS 3517
CourtCourt of Appeals for the First Circuit
DecidedDecember 24, 1952
Docket4673_1
StatusPublished
Cited by20 cases

This text of 200 F.2d 884 (United States v. McCrillis) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. McCrillis, 200 F.2d 884, 1952 U.S. App. LEXIS 3517 (1st Cir. 1952).

Opinion

MAGRUDER, Chief Judge.

In this case the United States appeals from a judgment for the defendant landlords in an action to recover statutory damages for rental overcharges under § 205, and to obtain an injunction and an order of restitution under § 206(b) of the Housing and Rent Act of 1947, as amended, 61 Stat. 193, 63 Stat. 18, 50 U.S.C.A. Appendix §§ 1895, 1896(b).

Again we meet the contention by the government, though there was nothing in the Act so providing, that a landlord defending an enforcement suit has no standing to challenge in the district court the validity of the regulation or order claimed by the government to have established the lawful maximum rent, where the landlord had failed to invoke available administrative procedure whereby he might have had the regulation or order set aside by administrative action.

In Smith v. United States, 1 Cir., 1952, 199 F.2d 377, this contention was examined at length and rejected. We adhere to our holding in that case.

It was pointed out in Smith v. United States, supra, that the discretionary rule adopted by courts of equity to the effect that a petitioner will be denied equitable relief where he has failed to pursue an administrative remedy under which he might obtain the same relief, is wholly misapplied when invoked against a landlord who is not seeking equitable relief but is merely defending himself against an enforcement action. We distinguished cases where the landlord was a petitioner seeking equitable relief by way of an injunction or declaratory judgment. Also we carefully distinguished the situation which was before us in Dauksewicz v. United States, 1 Cir., 1951, 194 F.2d 52, for reasons which need not be repeated. Cases under the Emergency Price Control Act of 1912 were said to be off the point, because there the Congress itself had withdrawn from the district courts jurisdiction or power to consider the validity of price or rent regulations or orders, and, as that Act originally provided, the only way to raise the issue of validity was by filing a statutory protest with the Price Administrator, followed by a complaint in the Emergency Court of Appeals upon administrative denial of the protest.

The situation was altered when the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 901 et seq., terminated on June 30, 1947. The Housing and Rent Act of 1947, which took over the field of rent control, contained no provision depriving courts, other than the Emergency Court of Appeals, of jurisdiction to determine the validity of ■ regulations or orders issued under that Act. Thereafter, there was no statutory roadblock to prevent a landlord from challenging the validity of a rent regulation or order as a normal legal defense to an enforcement action based thereon. Further, there was no statutory *886 prescription excluding such defense if the landlord had failed to exhaust his administrative remedies. If Congress had intended thus to limit the defense of invalidity, the Act would probably have contained some provision for a mandatory stay of the enforcement proceeding pending the landlord’s application for administrative review; the situation might well be that the affected landlord would be content not to contest the regulation or order further, as long as he was not brought into court to defend an enforcement action for alleged past violations predicated upon the regulation or order. Nor was there anything in the rent regulation (14 F.R. 5711) or in the rent procedural regulation (14 F.R. 1783) purporting to require exhaustion of administrative remedies, even if the administrative agency had regulatory power, which we do not believe it had, thus to limit the jurisdiction of the enforcement courts. All that the procedural regulation did was to provide an optional procedure whereby a landlord might obtain administrative review of rent regulations and orders in advance of being hailed into court to defend an enforcement action.

In the absence of any statutory provision on the subject, we stated in Smith v. United States, supra [199 F.2d 382], that we were not aware “of any general judge-made doctrine that a defendant in an enforcement suit, charged with having violated an administrative regulation or order, is precluded from setting up the defense that the regulation or order is invalid, merely because the defendant had failed to make use of an available administrative procedure by which he might have obtained administrative action to set aside the regulation or order.” We know of no controlling precedent in the Supreme Court establishing any such proposition. Yakus v. United States, 1944, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834, merely upheld the provisions of the original Price Control Act of 1942 under which the validity of a regulation or order could be challenged only by following the statutory protest procedure. Myers v. Bethlehem Shipbuilding Corp., 1938, 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638, also cited by the government, held that an employer, charged with the commission of unfair labor practices under the National Labor Relations Act, was not entitled to seek an injunction in a federal district court forbidding the National Labor Relations Board from holding a hearing upon the complaint, in view of the fact that the Act had provided an appropriate and exclusive procedure before the Board, and an adequate opportunity, through review by the circuit court of appeals, to secure judicial protection against a possible illegal action by the Board. Close on the heels of that case, in Federal Power Commission v. Metropolitan Edison Co., 1938, 304 U.S. 375, 385, 58 S.Ct. 963, 968, 82 L.Ed. 1408, the Court cited the Myers case in support of the proposition that “attempts to enjoin administrative hearings because of a supposed or threatened injury, and thus obtain judicial relief before the prescribed administrative remedy has been exhausted,, have been held to be at war with the long-settled rule of judicial administration.”

It is true that by the Defense Production Act Amendments of 1952, which became law June 30, 1952, Pub.L. 429, 82d. Cong., 50 U.S.C.A.Appendix, § 2061 et seq.,. jurisdiction has been withdrawn from the district courts to consider the validity of rent regulations or orders; and now the validity of such regulations or orders, as-well as of regulations or orders relating to price controls, can be challenged only through the protest procedure of § 407(a) of the Defense Production Act of 1950, followed by review • in the Emergency Court of Appeals, or by an application under § 408(d) of the Defense Production Act, filed in the court in which enforcement proceedings are pending, for leave to file a complaint in the Emergency Court of Appeals attacking the validity of any provision of the regulation or order which the defendant is alleged to have violated. As indicating the purpose of these 1952 amendments, and showing a legislative awareness that prior thereto a landlord defending an enforcement action could test in the enforcement court the validity of the regulation or order he was charged with having *887 violated, we quote from H.Rep. No.

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Bluebook (online)
200 F.2d 884, 1952 U.S. App. LEXIS 3517, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-mccrillis-ca1-1952.