147 F.2d 550 | Emer. Ct. App. | 1944
This case arises as. the result of the Price Administrator’s denial of an application made by complainant, a brewer of malt beverages, for approval of a maximum price claimed to be permitted for a brand of beer under existing price regulations.
In June 1943, complainant was producing and selling two brands of beer, one known as “Ambrosia,” the other known as “Nectar”. The maximum price per barrel for “Ambrosia” was $16.10; for “Nectar,” $19.10. Complainant desired to discontinue production of “Ambrosia” and to produce instead a brand to be known as “Ambrosia Supreme”. The applicable regulation was Maximum Price Regulation No. 259 — Domestic Malt Beverages,
Complainant, relying on the maximum prices established by its competitors for what it claimed to be similar beers, established for “Ambrosia Supreme” a maximum price of $17.60 per barrel. On July 31, 1943, the production of “Ambrosia” was discontinued and on either August 1 or 3, 1943 (the record is not clear as to which), “Ambrosia Supreme” was introduced and delivered to complainant’s customers.
Under Maximum Price Regulation No. 259 there developed an inflationary practice of introducing new brands of beer on the market and pricing them in relation to high priced beers of competitors. To combat this tendency the Administrator, on August 3, 1943, issued Amendment No. 2 to Maximum Price Regulation No. 259, effective August 9, 1943.
On August 14, 1943, complainant filed its application for approval of the maximum price of $17.60 per barrel which it had established for “Ambrosia Supreme”. In its application it stated that its only other product was “Nectar,” which could not be referred to in establishing a maximum price since it was in a higher-priced bracket. Various brands of competing manufacturers were named as similar to “Ambrosia Supreme”. After information concerning “Ambrosia” had been submitted at the Administrator’s request, the application was denied by letter on October 11, 1943, and by formal order, entitled Order No. 7, on December 10, 1943. The position of the Administrator was that the maximum price for “Ambrosia Supreme” should be $16.10 per barrel, the same price which had been charged for “Ambrosia”. A formal protest then was filed against Order No. 7, and upon its denial, complaint was filed in this Court.
The question presented for our consideration is whether the order of denial was issued in compliance with the Regulation. Complainant maintains that the Administrator was arbitrary and capricious in making the determination that “Ambrosia Supreme” was more similar to “Ambrosia” than to “Nectar”. It urges that comparison of alcohol by volume is the only legal method of determining the similarity of beers, and that the Administrator ignored the fact that by this standard “Nectar” is the more similar to “Ambrosia Supreme”. In support of its contention complainant argues that the Office of Price Administration is prevented by the so-called Taft Amendment to the Emergency Price Control Act
Complainant makes the contention generally, as we understand it, that under the Regulation as it existed at the time the Administrator ruled on complainant’s application, the Administrator was limited to comparison of the quality and ingredients of beers in determining their similarity. We find no reason for so restricting the meaning of “similar” as used in the Regulation. The Administrator has taken the position that in determining similarity his consideration must include not only brewing process and ingredients but also advertising history, trade usage, public acquaintance and price line in which the product being priced would normally have sold during the pertinent base period. This interprefation now has been incorporated into the Regulation by the language of Amendment No. 3.
On the basis of this interpretation, we cannot find that the Administrator was arbitrary or capricious in determining that “Ambrosia” was the more similar to “Ambrosia Supreme”. “Ambrosia” was complainant’s popular product. It represented 90% of complainant’s sales. The new product was admittedly produced to cater to the same trade which had enjoyed “Ambrosia”. The 90% of complainant’s sales which had been of “Ambrosia” are now “Ambrosia Supreme”. The strong resemblance in the names is persuasive of the similarity between the two products. The cost of the ingredients of “Ambrosia Supreme” was only 40 per barrel more than that of “Ambrosia,” while “Nectar’s” ingredients cost 100 per barrel more than those of “Ambrosia Supreme”. The record indicates that “Nectar” had been and continued to be complainant’s high priced, premium product. There is no showing of any significant similarity between the new beer and either of the old ones so far as ingredients are concerned. The. only respect in which “Ambrosia Supreme” is shown to be clearly more similar to “Nectar” than to “Ambrosia” is in the percentage of alcohol by volume.
The views which we have expressed dispose of a point made by complainant in an affidavit submitted to the Court after the complaint was filed. This affidavit was submitted directly to the Court with the consent of the Administrator, who, however, reserved the right to object to its materiality. The affidavit is a statement by a man employed for many years by a firm of consulting chemists as Director of the Chemical Laboratory and Technical Expert and Adviser to breweries and brew-masters on formulas for the making of beer and analysis of beer. He stated that an analysis was made, under his supervision and direction, of the three brands here involved and that the “analysis showed that ‘Ambrosia Supreme’ was a much more similar beer to ‘Nectar’ than it was to ‘Ambrosia’.” Counsel for complainant stated at the oral argument that this information had been before the Administrator during the protest proceeding and it appears from the record before us that the evidence was offered to the Administrator after the protest had been denied and he considered it of insufficient importance to warrant re opening of the protest proceeding. We have no doubt that the affidavit which apparently relates solely to chemical analysis, at best only one of the many factors to be considered in determining similarity, does not outweigh the evidence in the record showing that “Ambrosia Supreme” is more similar to complainant’s “Ambrosia” than to' its “Nectar”.
Complainant takes the position that Amendment No. 2 is invalid as being an ex post facto law denounced by Section 9, Article I of the Constitution-of the United States. Its position appears to be that Amendment No. 2, issued August 3, 1943, to take effect August 9, 1943, contained a retroactive clause providing that a manufacturer who previously (that is, between March 31, 1942, and August 9, 1943) had established a maximum price for his malt beverage newly produced must apply to the Administrator for authority to use the established price; while conceding the ex post facto Constitutional provision relates primarily to criminal cases, complainant suggests that “if the Price Administrator enters an order under Amendment No. 2, which is retroactive, and the person against whom the order is entered fails to obey it, he may be subject to criminal prosecution.” Complainant’s position is without foundation. The changes in the prices of malt beverages made possible by the Amendment were prospective only: in each instance the reductions could only become operative on o*r after the effective date of the Regulation. Therefore it is clear that the Administrator did not, within the meaning of the Constitutional provision, provide criminal consequences for acts committed before the issuance of the Amendment.
The complaint is dismissed.
7 F.R. 8950.
8 F.R. 10902.
Complainant relies upon part 4 of the Taft Amendment, Section 2(j) of the Act as amended: § 2(j) “Nothing in this Act shall be construed * * * (4) as authorizing any order of the Administrator fixing maximum prices for different kinds, classes, or types of a commodity which are described in terms of specifications or standards, unless such specifications or standards were, prior to such order, in general use in the trade or industry affected, or have previously been promulgated and their use lawfully, required by another Government agency.”
Section 24(c) of Regulations No. 7.
8 F.R. 16835. The Amendment, issued December 14, 1943, altered Section 1420.59 to read as follows: “A seller’s selection of a similar domestic malt beverage * * * of his own or of his most closely competitive seller’s manufacture shall include, but shall not be restricted to, considerations of similarity of (a) class and type (‘beer,’ ‘lager beer,’ ‘ale,’ ‘porter,’ ‘stout/ or any other class or type designation commonly applied to malt beverages) as recognized under the provisions of Section 24 of .Regulations No. 7, as amended, issued by the Federal Alcohol Administration, Treasury Department; (b) brewing process and types, grades, quantities and proportions of ingredients, without material variation; (c) advertising history, trade usage and public acquaintance; and (d) price line in which the domestic malt beverage being priced would have-normally sold during the applicable base period.”
Cf. Consolidated Water Power & Paper Co. v. Bowles, Em.App., 146 F.2d 492; Bowles v. Nu Way Laundry Co., 10 Cir., 1944, 144 F 2d 741.
Webster’s New International Dictionary (2d Ed., 1939); Black’s Law Dictionary (3rd Ed., 1933).