GAY UNION CORPORATION, Inc., v. WALLACE, Sec. of Agriculture. CANAL BANK & TRUST CO. v. SAME.
Nos. 7402, 7403.
United States Court of Appeals for the District of Columbia.
Decided Feb. 26, 1940.
Writ of Certiorari Denied June 3, 1940. See 60 S.Ct. 1098, 84 L.Ed.
K. Thomas Everngam and Horace S. Whitman, both of Washington, D. C., and Leonard B. Levy, of New Orleans, La., for appellants.
John S. L. Yost and W. Carroll Hunter, Sp. Assts. to Atty. Gen., for appellee.
Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.
VINSON, Associate Justice.
These two cases are appeals, under
Under Title III,
For the year 1939 the Secretary set a quota of 424,727 tons for the mainland cane sugar area (Louisiana and Florida), and this quota was allotted among 69 processors. Appellants were denied any participation in the allotment. The Act gives to any person whose application for an allotment has been denied a right to appeal to this court within twenty days.
Appellants are Gay Union Corporation, Inc., and Canal Bank & Trust Company (in liquidation). Gay Union owns four sugar plantations located in Louisiana with a factory located on one of them. Although the factory has not operated since 1928, it is claimed that it has been “maintained intact“. The factory allegedly has a twenty-four hour processing capacity of 800 tons of sugarcane and, in its application for an allotment, Gay Union stated that a survey made in 1938 indicated that about 30,000 to 35,000 tons of sugarcane were available for processing at their factory. Without an allotment it is claimed that the factory is valueless, on the theory that operations could not safely be commenced without assurance of a right to market the product.
Canal Bank likewise owns a plantation and a sugar factory located in Louisiana. No sugar has been processed since 1929, but Canal Bank claims that the factory has
On January 18, 1939, pursuant to the provisions of
Public notice was given of a hearing on the subject of allotments to be held in Mobile, Alabama, on February 8, 1939. The meeting was largely attended by processors. Apparently the regulations do not require an applicant to file a petition asking for an allotment. Instead, the discussion, as we gather from the record, consists largely of suggestions how the quota shall be allotted. Witnesses are heard, and the matter is then considered and determined by the Secretary on the recommendation of his examiners.
In the present instance, the Sugar Division of the Department proposed that the basis of allotment should be past marketings of sugar and processing of sugarcane to which proportionate shares pertained, and that equal weight be given them. Several other allotment formulae were submitted at the hearing by the processors, including a proposal that processings from proportionate shares should be given three-fourths weight. After the hearing, the Secretary determined to give three-fourths weight to processings from proportionate shares and one-fourth weight to past marketings in order to protect producers of sugarcane. Processings were measured by the processings from proportionate shares of the 1938-39 crop, while past marketings were measured by specified averages of marketings during the four calendar years, 1935-6-7-8. If appellants had been engaged in processing or in the marketing of sugar during the respective years they would have received an allotment. But since they were not engaged in either during any of the years mentioned they were excluded. In reaching the result announced, the Secretary expressly considered only two of the three factors contained in the Act, and omitted from express consideration the third, namely present ability to market. The appellants claim that if the Secretary had considered ability to market or past marketings prior to 1929, they would have received allotments. The view of the Secretary is that Congress intended these factors
The Government raises a preliminary issue, which we shall consider first. It is the contention that the case is moot. The ground of this is that on September 11, 1939, shortly after the outbreak of war in Europe, the President suspended the provisions of Title II of the Sugar Act,4 and that this had the effect of removing the restrictions on the marketing of sugar. The result, the Secretary says, was to grant appellants as great, if not greater relief than any which could possibly be granted by an order in this proceeding. Doubtless this is true so far as concerns any relief which this court can afford appellants with relation to an allotment for the year 1939. But while the case was under consideration by us, the President revoked his earlier suspension,5 and the Secretary has now reinstated his regulations governing notice and hearings to establish new allotments,6 and we take judicial notice of the fact that by an order dated January 13, 1940, he has fixed the 1940 quota, in substantially the same amount, for each area7 and individual allotments may follow. From this, it seems not unlikely that the order complained of may be replaced by another of substantially similar import and that appellants, in the current year, will find themselves in the same position as in the preceding year, since, in the very nature of things, it will be again impossible to secure a court review and obtain a decision before the end of the allotment period.
We are clear that this brings the case under the rule announced in Southern Pacific Terminal Co. v. Interstate Commerce Comm., 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310. There the Supreme Court said, in answer to the defense that the order appealed from had expired, that sometimes a different conclusive factor is shown. In that case it was held that expiration of the order of the Interstate Commerce Commission did not make the case moot. “The questions involved in the orders of the Interstate Commerce Commission are usually continuing (as are manifestly those in the case at bar), and these considerations ought not to be, as they might be, defeated, by short-terms orders, capable of repetition, yet evading review, and at one time the government, and at another time the carriers, have their rights determined by the Commission without a chance of redress.”
In Boise City Irr. & L. Co. v. Clark, 131 F. 415, the Ninth Circuit Court of Appeals, on a similar state of facts, said a case was never moot in a situation in which there is the necessity of deciding a question of law to serve as a guide to the body called upon to act again in the same matter. And to the same effect, see United States v. Trans-Missouri Freight Assn., 166 U.S. 290, 308, 17 S.Ct. 540, 41 L.Ed. 1007; and see also Federal Trade Comm. v. Goodyear Tire & Rubber Co., 304 U.S. 257, 58 S.Ct. 863, 82 L.Ed. 1326, and Panama Ref. Co. v. Ryan, 293 U.S. 388, 413, 414, 55 S.Ct. 241, 79 L.Ed. 446, where the rule announced in the Southern Pacific Terminal case is reaffirmed.
In the present case it is clear that the statute was intended to give an aggrieved person a remedy by appeal to this court, but it is equally clear that after the Secretary has announced his decision, the time for appeal is wholly inadequate for any effective relief. And it is also true that, unless the rights of the parties under the regulation complained of are determined, the result in the present year will be again to leave appellants without remedy. We think, in these circumstances, that even though we are without power to grant the specific relief prayed, our duty is to determine the question presented.
We turn now to a consideration of the question whether the Act authorizes the Secretary to deny a marketing allotment to appellants whose sugar factories have not operated in the preceding decade.
The Sugar Act was enacted for the “purpose of providing for the stabilization
Under
The Secretary is authorized to invoke the allotment provisions in several divergent circumstances in the United States, Hawaii, or Puerto Rico, and allotments in all instances must afford a “fair, efficient, and equitable distribution” of the quota. The appearance of the word “or” preceding the third standard serves to confirm the reasonable expectation that Congress would afford the Secretary a considerable measure of discretion in applying the allotment provisions to variant situations.12 The
It is significant to note that in respect to allotments of proportionate shares to growers
We are of the opinion that the third standard, ability to market, is an alternative to be invoked at the discretion of the Secretary in securing that fair, efficient, and equitable distribution of the quota commanded of him by Congress, and it must be so construed unless such construction is inconsistent with other provisions of the Act.15 The only provisions of the act that need be considered in respect to this are also found in
The appellants’ factories have not operated since 1929 and it appears that in the Louisiana area there are a number of other mills similarly situated. Thus a large potential processing and marketing capacity has lain idle for a rather extended period, idleness dictated not by governmental allotments16 but by various economic considerations. Since the marketing quota allotted in 1939 was appreciably less than the amounts of sugar actually processed by the sixty-nine operating mills in any of the preceding three years,17 it is clear that allotments to long idle mills would have been made at serious expense to those operating. So applied the Act would have been utilized, not to preserve the living, but to resurrect the dead at the expense of the living. Moreover, it may be doubted whether allotments to long idle mills in this situation would have effected an efficient distribution of the quota from the viewpoint of consumers and growers, whose interests are paramount. In the light of the general purpose of the statute to stabilize the sugar industry, and the apparent duplication of processing facilities,
we cannot say that allotments on the basis of processings for the previous year and marketings over the previous four year period were inconsistent with a “fair, efficient, and equitable distribution” of the quota, affording an “equitable opportunity” to interested persons to market sugar. It follows that construction of the third standard “ability to market” as an alternative to be invoked at the discretion of the Secretary is consistent with these other provisions of the Act, and, further, that the Secretary did not exercise his discretion in an arbitrary or capricious fashion in omitting express consideration of this standard. Nor can it be said that the Act so construed effects an unconstitutional delegation of legislative power.18
We conclude that under
It may be observed that even if the Act required the Secretary to consider “ability to market” in all cases (which it does not) the appellants would not be entitled to an allotment on the basis of the evidence they adduced preceding the allotment order. In the “regulations Governing Notice and Opportunity for Hearing Concerning Allotment of Quotas * * *“,20 promulgated by the Secretary, it is provided that the normal mode of receiving testimony is to be followed at such hearing but that “Affidavits as to relevant economic facts may be admitted in evidence, but the Secretary, in determining the weight to be given to such affidavits, will consider the lack of opportunity for cross examination“. At the hearing Gay Union‘s representative could produce no indicia of authority evidencing his right to represent the factory, hence no evidence in behalf of Gay Union was introduced at that time. An affidavit was later submitted to the Secretary stating, in behalf of Gay Union, that their factory had a twenty-four hour capacity of 800 tons; that the factory had not operated since 1928 “due largely to economic conditions over which the owners had no control“; that the factory had been maintained intact; that a survey of the cane supply situation indicated that about 30,000 to 35,000 tons of sugarcane were available for processing at the factory, and that the factory should be granted a marketing quota as a protection to the sugarcane growers in its vicinity.
Representatives of Canal Bank appeared at the hearing and offered as evidence in their behalf only an affidavit stating that their plantation in 1928 produced 7,500 tons of sugarcane and could produce 15,000 tons per year; that their factory had a capacity of 600 tons of sugarcane per twenty-four hours; that the factory, though not operated since 1929, “can be placed in operation on short notice“; that it had been maintained with the intention of operating the same at such time as an adequate cane supply was available; and that opportunities in 1937 and 1938 to sell the mill had been lost because no allotment was assured.
These affidavits and briefs filed by both Gay Union and Canal Bank with the Secretary indicate that they regarded physical ability to process as the equivalent of ability to market. For a decade that had not been true in respect to these mills. Actual ability to market involves many factors other than the rated mill capacity.21 One consideration is the possession of adequate capital, and Canal Bank, owner of its own factory and 51% of the stock in Gay Union and creditor of the latter in an amount exceeding $240,000, is in liquidation. The affidavits filed by the appellants respecting
Finally, it should be pointed out that absence of a marketing allotment does not legally prohibit the appellants from processing sugar. True, under an allotment system, they cannot market their product in the year of its production, but the appellee concedes that on the basis of that production, they would be entitled to a marketing allotment for the next year. Other processors are forced to carry over large inventories, hence there is little injustice in requiring those in the appellants’ position to do likewise.22 The loss to the appellants occasioned by this sort of regulation is incidental to the larger legislative scheme23 and gives rise to no constitutional infirmities in the Act in view of the Supreme Court‘s decisions sustaining similar statutes.24
The order of the Secretary denying the appellants an allotment of the 1939 sugar quota was proper.
Affirmed.
GRONER, Chief Justice (dissenting in part).
I regret I am unable to concur in all of the opinion. I am in agreement with the conclusion that recent decisions of the Supreme Court impel a finding that the Sugar Act is constitutional. I likewise agree that the case is not moot, but I dissent from so much of the opinion as holds that “ability to market” is an “alternative” standard as to which Congress has delegated discretion to the Secretary of Agriculture in making marketing allotments. I regard the question as of importance in principle, and for that reason I shall state my views briefly.
The opinion approves the action of the Secretary in adopting only two of the three standards established by the Act and in excluding from consideration the third, namely, present ability to market. Both appellants were denied allotments, not because they failed to make the proper showing of ability to market, but solely because the Secretary had decided to ignore that standard and to make all allotments exclusively on the basis of past records in recent years, a standard under which they could not qualify. In my opinion, Congress intended the Secretary to use all three standards to accomplish the “equitable allotment” provided for in the Act. My reasons are these:
Before the enactment of the Sugar Acts, every citizen had the lawful right to enter the business, to process sugar, and to sell it to the general public. This privilege arose out of the inherent right—the common right—of the citizen to cultivate the ground, to purchase products, or to sell them, to carry on trade, or to maintain himself or his family by free industry. The effect of the 1937 Act, as construed by the Court, is to diminish in some cases
And the same principle was recognized and applied as late as 1906 in the case of Texas & Pacific Railway v. Abilene Cotton Oil Company, 204 U.S. 426, 437, 27 S.Ct. 350, 354, 51 L.Ed. 553, 9 Ann.Cas. 1075, where the Court said: “* * * a statute will not be construed as taking away a common-law right existing at the date of its enactment, unless that result is imperatively required; that is to say, unless it be found that the pre-existing right is so repugnant to the statute that the survival of such right would in effect deprive the subsequent statute of its efficacy; in other words, render its provisions nugatory“. And see, to the same effect, Lewis Sutherland on Statutory Construction, Secs. 542, 546; Commonwealth v. Beck, 187 Mass. 15, 72 N.E. 357; Stamford v. Fisher, 140 N.Y. 187, 35 N.E. 500; State v. Dauben, 99 Ohio St. 406, 124 N.E. 232, 233. In all, the rule is recognized that statutes “which restrain the exercise of any trade or occupation, or the conduct of any lawful business, or which impose restrictions upon the use, management, control, or alienation of private property, will be strictly construed“, and will not be extended to include restraints or limitations not clearly prescribed. We ought not, therefore, in reading the Act, to attribute to Congress the adoption of a subtle purpose to subject the property of one citizen to disuse and abandonment for the advantage of another. Considered in this aspect, we think the least that can be said is, that the language of the Act casts doubt on the correctness of the construction. In express words it admonishes the Secretary: “to afford all interested persons an equitable opportunity to market sugar * * *” by allotting to persons who market or import sugar * * * in such manner and in such amounts as to provide a fair, efficient, and equitable distribution of such quota or proration thereof, by taking into consideration * * * processings * * * past marketings * * * or the ability * * * to market * * *“.
I am not unmindful of the fact that the Act contains no specific reference to persons who propose to market nor sets aside a definite percentage of the quota to new producers, but it seems clear to me that the words—fair, efficient, and equitable—
Thus, as I think, the agricultural program, considered as a whole, shows the design and purpose of Congress to regard the rights and interests of new producers and, though there is no express reference in the Sugar Act to the part of the quota to be given new processors-marketers, there is the statement of congressional purpose “to afford all interested persons an equitable opportunity to market sugar“, and to this end the standard of “ability to market” is set up for application by the Secretary; all of which, I think, indicate the congressional purpose to include newcomers in some equitable division of the whole, and apply the alternative standard where the applicant has no past record in the field, but can show his ability.
So considered, and having regard to the rule of statutory construction which I have discussed, I think it clear that no purpose or intention of Congress is shown to authorize the exclusion of a person solely because he had neither processed nor marketed sugar over a fixed period of time prior to the allotment. I think the contrary is the fair construction of the Act. This construction is consonant with other similar statutes, prevents monopoly, and avoids an absolute prohibition upon new industry where such an intention does not clearly appear in the statute. Cf. United States v. United Verde Copper Co., 196 U.S. 207, 215, 25 S.Ct. 222, 49 L.Ed. 449.