SAMETT v. RECONSTRUCTION FINANCE CORPORATION, 165 F.2d 605

BRATTON, Circuit Judge. Ben Samett instituted in the United States Court for Colorado this class action •against Reconstruction Finance Corporation.

It was alleged in the complaint that plaintiff was engaged in the business of slaughtering livestock; that he was a resident of Denver, Colorado, and that his place •of business was in that city; that there was due him a balance of $22,660 on accrued and vested subsidies; that in like manner large balances on accrued and vested subsidies were due other slaughterers of livestock throughout the country; that acting under the pretended authority of Economic Stabilization Directive No. 41, as amended, and certain regulations promulgated by the Reconstruction Finance Corporation, payment of the respective amounts •due had been refused; and that such directive and such regulations in their application to the business of plaintiff and to the businesses of others similarly situated undertook to lay forfeitures and penalties and were unlawful, illegal, and void.

A declaratory judgment was sought determining and adjudicating that the directive and regulations referred to were illegal, null, and void; awarding plaintiff judgment against the defendant Reconstruction Finance Corporation in the sum of $22,660, with damages for the wrongful withholding of such sum; awarding like recovery in the respective amounts due others similarly situated who should elect to join plaintiff and participate in the prosecution of the action; and declaring the several judgments to be a lien upon all subsidy moneys appropriated by Congress and placed under the control of the defendant Reconstruction Finance Corporation.

The court dismissed the action for lack of jurisdiction, and plaintiff appealed.

Section 204(

a) of the Emergency Price Control Act, 56 Stat. 23, 50 U.S1C.A. Appendix, § 901 et seq., provided in effect that the Emergency Court of Appeals should hf.ve exclusive jurisdiction to set aside a regulation, order, or price

schedule promulgated by the Administrator; and

section 204(

d) provided that judgments and orders of the Emergency Court of Appeals should be subject to review by the Supreme Court, and that, except as provided in the section, no court should have jurisdiction or power to consider the validity of any regulation, order, or price schedule.

These provisions were valid; and under them, only the Emergency Court of Appeals in the first instance, and the Supreme Court on certiorari to the Emergency Circuit Court of Appeals, had jurisdiction of an action attacking the validity of a regulation promulgated by the Administrator, Office of Price Administration, or by -the Director, Office of Economic Stabilization, on the ground that it was illegal and void. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834; Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892; Bowles v. Capitol Packing Co., 10 Cir., 143 F.2d 87; Bowles v.

Nu Way Laundry Co., 10 Cir., 144 F.2d 741, certiorari denied, 323 U.S. 791, 65 S.Ct. 431, 89 L.Ed. 631; Bowles v. Jones, 10 Cir., 151 F.2d 232. Appellant relies upon

section 2(

m) of the Act to confer jurisdiction upon the United States Court for Colorado. That

section came into the Act as an amendment in 1944, 58 Stat. 632, 636, 50 U.S.C.A.

Appendix § 902(m), and it provided in presently material part that no agency of the Government should, in the payment of sums authorized by the Act or any other act relating to the production or sale of agricultural commodities, or in the fixing of quotas for the production or sale of any such commodities, impose any conditions or penalties not authorized by the provisions of the Act or other acts, or lawful regulations issued thereunder; that any person aggrieved by any action of any such agency contrary to the provisions of the Act might petition the district court of the United States of the district in which he resided or had his place of business for an order or a declaratory judgment to determine whether the action or the failure to act was in conformity with the provisions of the Act or otherwise lawful; and that the court should have jurisdiction to grant appropriate relief.

It is argued that the

section gave to the district courts concurrent jurisdiction with the Emergency Court of Appeals in a narrow class of cases, particularly those in which conditions or penalties had been imposed without authority in law; and that this case fell within that narrow class. But

section 2(

m) did not purport to be an amendment to sub-paragraph (

a) or subparagraph (

d) of

section 204. It was an independent provision which had application in cases where the plaintiff felt aggrieved at administrative action taken or failure to act under the terms of the Act or under a valid regulation. It conferred jurisdiction upon the district courts of the United States to entertain suits where the administrative action taken or the failure to act under the Act or under a valid regulation was challenged for an erroneous determination of fact or law. It was not a grant of jurisdiction to determine the validity of a challenged regulation. Illinois Packing Co. v. Defense Supplies Corp., D.

C., 57 F.Supp. 8, affirmed, 7 Cir., 156 F.2d 875. The crux of this case was primarily an attack upon the validity of a directive promulgated under the authority of the Emergency Price Control Act. The directive itself was attacked on the ground of being illegal, null, and void. It was not a case where administrative action or non-action under a valid regulation was challenged. The action was within the scope and meaning of

section 204(

a) and (d); and under the law existing at the time of the institution of the action and at the time of its dismissal only the Emergency Court of Appeals had original jurisdiction to entertain it. Illinois Packing Go. v. Defense Supplies Corp., supra. The judgment is affirmed.