TAYLOR
v.
BROWN, Price Adm'r.
United States Emergency Court of Appeals.
*655 *656 Stanley W. Taylor, in propria persona, and C. M. Walter, of Oakland, Cal., and John C. Stirrat, of San Francisco, Cal., for complainant.
David Ginsburg, Gen. Counsel, Thomas I. Emerson, Associate Gen. Counsel, Nathaniel L. Nathanson, Asst. Gen. Counsel, and Sol M. Linowitz, Carl H. Fulda, Maurice Alexandre, and Betty L. Brown, Attys., all of the Office of Price Administration, all of Washington, D. C., for respondent.
Before VINSON, Chief Judge, and MARIS and MAGRUDER, Judges.
Writ of Certiorari Denied November 15, 1943. See
MARIS, Judge.
The complainant is the owner of certain real property in San Francisco, California, consisting of 53 rental units. His property is situated in the San Francisco Bay Defense-Rental Area with respect to which the Price Administrator established maximum rents, effective July 1, 1942, by Maximum Rent Regulation No. 28 issued June 30, 1942.[1] The regulation froze rents in the area at the level of March 1, 1942. Without showing that he had been adversely affected by the regulation the complainant filed a protest against it with the Administrator setting up as grounds of protest the unconstitutionality of the regulation and of the Emergency Price Control Act of 1942[2] under which it was issued. The Administrator denied the protest upon the ground that he was compelled to accept the constitutionality of the act. Thereupon the complainant filed his complaint in this court and in it, again without averring that he had been adversely affected, attacked the regulation and the act upon a broad constitutional front. We are *657 thus called upon to consider the constitutional validity of the act and regulation generally and without regard to their particular application to the complainant.
We entirely agree with the three-judge district court in Henderson v. Kimmel, D. C.Kan.1942,
The experience of this and other countries has shown that inflation is one of the greatest dangers to the home front in time of war. As the Administrator has pointed out in his brief, rent control is of first importance in preventing inflation. In the average family budget rent is, after food, the largest single item. From 15% to 30% of the wage earner's income is ordinarily devoted to payment of rent. Studies indicate that wage earners with moderate incomes in large American cities usually spend 20% of their earnings for rent.[3] In urban communities, three out of five families in 1940 were tenants and approximately $5,000,000,000 in rent was paid for nonfarm tenant-occupied dwelling units.[4]
Increases in rents have an immediate effect on wage earners. Other items are normally bought in small quantities and a small increase in the price of such commodities makes no great impression upon the wage earner. Rents are paid in lump sums, however, and wage earners are acutely aware of the fact that their living costs are increasing when rents are raised. Furthermore, in the case of most commodities, wage earners can reduce their purchases and thereby adjust their budgets to price increases; in the case of rental housing in war centers, however, workers generally have no choice, because the supply of housing is so severely limited. Accordingly, wage earners tend to demand wage increases to offset encroachments on their living standards resulting from higher rents. If such wage increases are not granted, labor friction and strikes may arise to impede the prosecution of the war. If wages are raised, the pressure for increased prices soon makes itself felt. Further demands for wage increases are thereby engendered. Thus an inflationary spiral initiated by rent increases gathers momentum. The vital importance of the rent control program to the war effort is thus apparent.[5]
We, therefore, pass to the question whether the act and the regulation are within the war power of Congress. That power is conferred by the following provisions of Art. 1, Sec. 8, of the Constitution:
"The Congress shall have Power To lay and collect Taxes, * * * to pay the Debts and provide for the common Defence and general Welfare of the United States; * * *
"To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
"To raise and support Armies * * *;
"To provide and maintain a Navy;
"To make Rules for the Government and Regulation of the land and naval Forces;
"To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; * * *
"To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, * * *."
The power thus granted is of the widest scope. Its breadth was well described by Justice Sutherland in United States v. Macintosh, 1931,
We accordingly conclude that the power to fix maximum rents for housing accommodations is within the war power conferred upon Congress by the Constitution.
The complainant contends that the rent control provisions of the Emergency Price Control Act violate the Constitution in that they involve an improper delegation of legislative authority by Congress to the Administrator. We find no merit in this contention. Section 1(a) of the act[6] declares it to be necessary to the effective prosecution of the present war and to be the purpose of the act
"to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; to prevent hardships to persons engaged in business, to schools, universities, and other institutions, and to the Federal, State, and local governments, which would result from abnormal increases in prices; to assist in securing adequate production of commodities and facilities; to prevent a post emergency collapse of values; to stabilize agricultural prices in the manner provided in section 3; and to permit voluntary cooperation between the Government and producers, processors, and others to accomplish the aforesaid purposes."
Here is a full and detailed statement of the Congressional purpose. It is followed in Section 2(b)[7] by the specification of standards to which the rent regulations of the Administrator are to conform. The regulations may be applied only to housing accommodations in defense-rental areas in which defense activities shall have resulted or threatened to result in increases in rents for housing accommodations inconsistent with the purposes of the act. The maximum rents established by the regulations are to be generally fair and equitable and such as will effectuate the purposes of the act. The Administrator is authorized to fix maximum rents at the level of April 1, 1941, unless he finds that some other date (not earlier than April 1, 1940) is more appropriate to eliminate increases in rents due to defense activities. Finally the Administrator is required to make adjustments for such relevant factors as he may find to be of general applicability in respect of such housing accommodations, including increases and decreases in property taxes and other costs.
We have no doubt as to the constitutional sufficiency of these standards for the guidance of the Administrator in the light of the act's recital of the Congressional purpose. It is obvious that in a desperate emergency of war such as at present confronts the country Congress could not itself appraise all the factors necessary to be considered in fixing maximum *659 rentals in each of the hundreds of diverse defense-rental areas which would be generally fair and reasonable in their local setting and which would carry out the Congressional purpose. In carefully stating its purpose and the standards which the Administrator is to follow in effectuating that purpose in the areas involved, Congress has done all that the Constitution requires of it. It is well within its power to clothe the Administrator with authority to ascertain the rental areas in which maximum rent regulation is required and to formulate in accordance with the standards set by the act the details of such regulations in each such area. United States v. Rock Royal Co-op., 1939,
Nor is the delegation of power to the Administrator rendered invalid by the provisions of Section 2(c)[8] of the act which authorize him in his regulations and orders to make classifications and differentiations and to provide for adjustments and reasonable exceptions, since these are to be only such as are necessary or proper in order to effectuate the purposes of the act. The objectives of the act are so clearly stated in Section 1(a) that this requirement is a sufficient measure of the authority delegated by Section 2(c). Pittsburgh Plate Glass Co. v. National Labor Relations Board, 1941,
The complainant next urges that the rent control provisions of the act and regulation are unconstitutional in that they impair the obligation of contracts, i. e., the existing leases, in that they are discriminatory against the housing industry, and in that they are confiscatory as applied to that industry. These contentions are all bottomed upon an alleged violation of the Fifth Amendment. Although the complainant has failed to show that he has been injured and, therefore, strictly speaking, has not established a right to raise these objections, we will nevertheless consider them on their merits.
It may be conceded that the act and regulation have the effect of impairing the obligation of certain existing leases. But even the States, to which the contract clause of the Constitution specifically applies, are not prohibited from impairing existing contracts when incidental to the proper exercise of their sovereign power to protect the safety, health and welfare of their people. Marcus Brown Co. v. Feldman, 1921,
The complaint is that the act and regulation discriminate against the housing industry because the act exempts wages, prices in a number of specified industries, and rents of nonresidential real estate and because the regulation exempts from control rents of certain employees and agricultural workers. We find nothing invalid in this classification, however. It is clear that Congress found that a greater need existed for the regulation of residential rents than of those of nonresidential properties or of wages or the charges of the exempted industries. There is a strong presumption that Congress correctly understood the needs of the nation and that the discriminations which it placed in the act were based upon adequate grounds. Middleton v. Texas Power & Light Co., 1919,
Then it is said that the rent control provisions of the act are confiscatory and thereby run afoul of the due process clause of the Fifth Amendment. In Wilson v. Brown, Em.App.,
The complainant urges that the act and regulation violate the constitutional provisions regarding unreasonable searches and seizures, ex post facto legislation and the right to trial by jury. His contentions as to unreasonable searches and seizures and ex post facto legislation are wholly without merit and require no discussion. His contention with respect to the right of trial by jury is answered against him by the decision of the Supreme Court in Block v. Hirsh, 1921,
The complainant argues that the act and Procedural Regulation No. 3[10] issued by the Administrator thereunder deprive him of a fair hearing. The provisions of Section 204[11] of the act conferring exclusive jurisdiction upon this court to set aside price and rent regulations and denying to all other courts, federal, state or territorial, the power to consider the validity of such regulations or to restrain the enforcement thereof, are said unconstitutionally to deny him recourse to local courts. The provisions of the act which prohibit this court from issuing temporary restraining orders and interlocutory decrees and which postpone the effectiveness of the decrees of this court for a period of thirty days and when certiorari is asked for until action by the Supreme Court, are said to render the act invalid. The provisions of the act and of the procedural regulation are said to subject the complainant to the arbitrary authority of the Administrator without proper opportunity for protest and hearing.
It is settled that Congress has complete power to determine the jurisdiction of the inferior federal courts and to grant, withhold, restrict or withdraw jurisdiction in its discretion. Kline v. Burke Constr. Co., 1922,
We do not think that the denial to this court of power to grant interlocutory *661 relief renders the act invalid. The due process clause does not guarantee to litigants the right to any particular form of relief. Gibbes v. Zimmerman, 1933,
"`A stay is not a matter of right, even if irreparable injury might otherwise result to the appellant. In re Haberman Manufacturing Co.,
"The numerous laws in which Congress has established administrative agencies for the exercise of its regulatory powers do not disclose any general legislative policy regarding the power to stay administrative orders pending review. Some statutes are wholly silent; some turn a court review into an automatic stay; some provide that the commencement of a suit shall not operate as a stay unless the court specifically so provides; some authorize the reviewing court to grant a stay where necessary. Significantly, the recent Emergency Price Control Act of 1942 [56 Stat. 23], explicitly denies the power of the reviewing court to enjoin enforcement of the administrative orders. * * *
"The various enactments in which the staying power is made explicit, as well as the statutes that are silent about it, afford debating points but no reliable aids in construing the Act before us. One thing is clear. Where Congress wished to deprive the courts of this historic power, it knew how to use apt words only once has it done so and in a statute born of the exigencies of war." [pages 16, 17 of 316 U.S., page 883 of
It must be borne in mind that the Emergency Price Control Act dealt with an emergency in which immediate action by the Administrator was of first importance and preliminary restraint might well prove disastrous. Judge Phillips stated the necessity for these provisions very cogently in the Kimmel case,
We find no merit in complainant's contention that Section 203 of the act and Procedural Regulation No. 3 did not afford him a fair opportunity for protest and hearing upon the rent regulation to which he objects. Section 203[14] authorizes the filing of a protest by any person subject to a regulation or order of the Administrator. The protestant may support his protest with affidavits and other written evidence. The Administrator must act promptly upon the protest, either granting or denying it, noticing it for hearing or giving the protestant an opportunity to present further evidence. If his protest is denied Section 204 authorizes the protestant to bring his case to this court which is fully empowered to set aside a protested regulation or order if it is shown to be arbitrary, capricious or not in accordance with law. This court may authorize the introduction of additional evidence upon application of either party.
Procedural Regulation No. 3 not only follows the statute in providing for the consideration of protests, establishing simple and inexpensive requirements therefor,[15] but also authorizes the filing of petitions for adjustments[16] and for amendment of regulations.[17] We think that this procedure is adequate to protect the rights of the complainant and, therefore, accords him due process of law. As the Supreme Court said in National Labor Relations Board v. Mackay Co., 1938,
Finally the complainant attacks Maximum Rent Regulation No. 28 as arbitrary and capricious in employing the maximum rent date method of rent control. Under this method it is said that landlords who have refrained from raising their rents are penalized and that no assurance is afforded that the owners of housing accommodations will receive a fair return from their properties. Complainant does not contend that the maximum rent date method is inappropriate as applied to his particular area. He protests the validity of the method as such.
It is clear that Section 2(b) of the Emergency Price Control Act authorizes the maximum rent date method of rent control and that it was the intention of Congress that the act should authorize it.[18] Under this method rents are fixed at the levels which landlords and tenants have voluntarily agreed upon after free bargaining in a competitive market on a date prior to the time when defense activities have affected the housing market. In Wilson v. Brown, Em.App.,
It is suggested that the provisions of the regulation restricting the eviction of tenants[19] render it invalid. These provisions are authorized by Section 2(d)[20] of the act, however, and we think that they are appropriate to effective rent regulation *663 and are not unreasonable. The regulation permits recovery of possession for any one of six specific purposes and in any other situation in which the landlord shows that the tenant's eviction will not be inconsistent with the purposes of the act or regulation or likely to result in the evasion thereof.
The complainant raises a number of other objections to the act, the regulation and the registration form, No. DD2-D, which he and other landlords are required to file. We have considered all of these objections but find them so wholly lacking in merit as to require no discussion here.
The complaint is dismissed.
Chief Judge VINSON participated in the consideration and decision of this case in conference, but resigned before the opinion was prepared.
NOTES
Notes
[1] 7 F.R. 4913.
[2] 50 U.S.C.A. Appendix § 901 et seq.
[3] Housing of Federal Employees in Washington, D. C., in May, 1941, Serial R. 1374, United States Bureau of Labor Statistics (1941).
[4] Characteristics of Housing: 1940, United States Summary, Series H-5 No. 1, Bureau of the Census (1940).
[5] The Price Administrator states that during World War I Great Britain, France, Italy, Germany, Austria, Hungary and Russia all put measures of rent control into effect. Likewise during the present war Great Britain and other nationes have done the same.
[6] 50 U.S.C.A. Appendix § 901(a).
[7] 50 U.S.C.A. Appendix § 902(b).
[8] 50 U.S.C.A. Appendix § 902(c).
[9] See Louisville & Nashville R. R. Co. v. Mottley, 1911,
[10] 7 F.R. 3936.
[11] 50 U.S.C.A. Appendix § 924.
[12] In Kittrell v. Hatter, 1942,
[13] Illustrations are Sec. 3224, Rev. Stat., 26 U.S.C.A. Int.Rev.Code, § 3653 (a), upheld in Steinhagen Rice Milling Co. v. Scofield, 5 Cir., 1937,
[14] 50 U.S.C.A. Appendix § 923.
[15] § 1300.208 et seq., 7 F.R. 3938 et seq.
[16] § 1300.202 et seq., 7 F.R. 3937 et seq.
[17] § 1300.235 et seq., 7 F.R. 3940.
[18] See the opinions of this court in Chatlos v. Brown, Em.App.,
[19] § 1388.1806, 7 F.R. 4915.
[20] 50 U.S.C.A. Appendix § 902(d).
