Opposition Brief — Gray v. Commodity Credit Corp.

7

Peat NET AORTA

? y

INDEX

Page ;

Opinions below - - - ...---------------------- 1

SerioMiathon. soo 55.50 bo b55 8 ae el. oh 3 1

; Questions presented. ___-........-- ae ee eo ee ee +8

a SA a oss io ds ci ccdnmcnn wtb denck sack age sbSS 3

ze 1. The 1044 raisin program... .......-.--------+--+.. 8

a 2. The necessity for the 1044 raisin program....._......- 7

a 8. The proceedings below - -.........----~------ buwks eae |

oi WRRMNINE so oo oo non ee eee dew ceseneeesunnes mensaeeene wy 2

> Conclusiom. -.,-.--....422----- see se 22-2 oo 2 ee - sone sees 20

x Append. 2. oon. 5 55 Se aed b en de see ces ecicee 22

a CITATIONS

Cases:

= '' American Bond & Mortgage Co. v. United States, 52 F. 2d

eS 318, certiorari denied, 285 U. 8. $88..... ..........-.-. ‘18, 20

a American Smelting & Refining Co. v. United States, 259

[aa Wy OS Fas BS is ores can esi acannacaskekeaee 19, 20

: Booth Fisheries v. Industrial Commission, 271 U. 8. 208... 19

Carmichael v. Southern Coal Co., 301 U. S. 495. Seba a eh wk wikia 17

4 Currin v. Wallace, 306 U. 8. 1...-.-------------------- eC

3 Dayton-Goose Creek Ry. Co. v. United States, 263 U. 8. 456_ 17

E.I.du Pont de Nemours & Co., Inc. v. Hughes, 50 F.2d 821. 19, 20

Gorieb v. Fox, 274 U. 8. 603. ..-.-------.-------------- 15

Highland v. Russell Car & Snow Plow Co., 279 U. 8. 253. 15

Hurley v. Commission of Fisheries, 257 U. 8. 223... ...-- 19

L. P. Steuart & Bro. v. Bowles, 322 U. 8. 398............ 15

Moor v. Texas & N. O. R. Co., 75 F. 2d 386, appeal dis-

elt: CAFC. TMi esiincck: Bice cbinctahsieniencins 18, 19

4 Morrisdale Coal Co. v. United States, 259 U. 8. 188. ...--- 19, 20

= Mulford v. Smith, 307 U. 8. 38.........-.---.-.-.------ 17

, New England Divisions Case, 261 U. 8. 184............-- 17

Noble State Bank v. Haskell, 219 U. 8. 104.....-...-..-.- 17

a North Dakota-Montana Wheat Growers’ Association v.

q United States, 66 F. 2d 573, certiorari denied, 291 U. 8.

> 672 a TN 18

Nortz v. United States, 204 U. 8. 317_.....-------------- 15

Perry v. United States, 294 U. 8. 330...........---.--.-- 15

Plymouth Coal Co. v. Pennsylvania, 232 U. 8. 531... ...-. 15

Railroad Retirement Board v. Alton R. Co., 295 U. 8. 330. 17

Ruppert v. Caffey, 251 U.S. 264._.......-.-.---.---.-- 15

St. Louis Co.'v. Prendergast Construction Co., 260 U.8.469. 19

Thompson v. Consolidated Gas Utilities Corp., 300 U. 8. 55- 17

(D

743903—47——-1

4 -————— +

i

Cases—Continued Page

United States v. Golden Gate Bridge & Highway District, 37

F. Supp. 505, affirmed, 125 F. 2d 872, certiorari denied,

316 U. 8. 700........------------------------------ 19

United States v. Rock Royal Cooperative, Inc., 307 U. 8.

BOB. oo ccice ce ni cee mcwwee ce ndcassncncnesexees 18, 16, 17

Wall v. Parrot Silver & Copper Co., 244 U. 8, 407-------- 19

White Oak Coal Co. v. United States, 15 F. 2d 474, certio-

rari denied, 273 U. 8. 756-..------------------------ 20

Wickard v. Filburn, 317 U. 8. 111_---.----------------- 17

Yarnell v. Hillsborough Packing Company, 70 F, 2d 435--- * 20

Z. & F. Assets Corp. v. Hull, 311 U. 8. 470-~----------- 20

Statute:

Second War Powers Act, Sec. 301 (a), March 27, 1942, c.

199, Tit. III, § 301, 56 Stat. 177; 50 U. S. C. App.,

Supp. V, 688_....-.-------------------------2-"---- 15

Miscellaneous:

Executive Order 9280 (7 F. R. 10179) - .---------------- 14

Executive Order 9334 (8 F. R. 5423) ---.---------------- 14

War Food Order 17, Amendment 5 (9 F. R. 8768)... 4,5, 19, 23

| Sate Sopeme Gone Ses

Ocroser TERM, 1946

No. 1281

C. E. Gray, J. C. Prevs anp FLoxp Brows,

PETITIONERS

v.

Commopity Creprr CoRPORATION, A CORPORATION

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES CIRCUIT COURT OF APPEALS FOR THE NINTH

CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the District Court for the South-

ern District of California (R. 105-142) is re-

ported at 63 F. Supp. 386. The opinion of the

Circuit Court of Appeals for the Ninth Circuit

(R. 155-157) is reported at 159 F. 2d 243.

JURISDICTION

The judgment of the Circuit Court of Appeals

was entered on January 28, 1947 (R. 157). The

petition for a writ of certiorari was filed on April

23, 1947. The jurisdiction of this Court is in-

voked under the provisions of Section 240 (a) of

aii . ee eR AR RN EE <0 AEE ARCO eR aN TNS

— |

ae

a Aart ete

ana tes Be NA Ae PG ON

2

the Judicial Code, as amended by the Act of

February 13, 1925.

1. Whether the court below erred in inter-

preting a contract entered into between respond-

ent, as purchaser, and petitioners and several

thousand other growers of Muscat and other

raisin variety grapes, as sellers, as providing for

the distribution of the proceeds to be derived

from the resale of those grapes among all

growers of raisin variety grapes pro rata in ac-

cordance with their production and regardless of

the particular. variety from which the proceeds

were derived.*

2. Whether petitioners have the standing to

question the constitutionality of this common

pool method of distribution.

3. Whether, if so, that program of distribution

violates any provision of the Constitution.’

1 For purposes of convenience, this method of distribution .

will be referred to as the common pool method, as contrasted

with the separate variety pool method, urged by petitioners,

under which the proceeds would be segregated into separate

funds dependent on variety, and each fund distributed only

to the growers of the particular variety contributing to the

fund.

* Minor questions involved are:

4. Whether the producers of varieties of grapes other than

the Muscat variety are indispensable parties, in whose ab-

sence petitioners cannot maintain this suit.

5. Whether petitioners are, in any event, entitled to invoke

the relief of a court of equity.

ne

3

a.

Pe

- This case tarns on the interpretation of See-

tion 5 of ‘a standard form of contract (R. 9-22) —

entered into between respondent, as purchaser,

and several thousand growers of Muscat and

other raisin variety grapes, as sellers.’ The gene-

sis of the contract is to be found in the 1944

raisin program of the War Food Administration,

of which respondent was a corporate agency.

The facts which underlay its adoption, all stipu-

lated below; are substantially as follows:

1. The 1944 raisin program. Raisins produced

in this country are made almost exclusively from

the Museat, Thompson, and Sultana varieties of

grapes—the ‘raisin variety grapes’’—and

through the natural process of sun-drying.

Grapes so dried become “natural condition

raisins’? and are then sold to packers for stem-

ming, cleaning, and, in some instances, seeding.

Grapes so treated are ‘‘processed raisins.’ Be-

eause of their high nutritional value, their rela-

tive non-perishability, and the ease with which

they can be packed and shipped, raisins (and

Zante Currants) are an essential wartime food

item, of greater importance than fresh grapes

(R. 41-44).

To stimulate the production of the raisin

variety grapes needed for military and civilian

* Section 5 of the contract is set out in the Appendix, infra,

pp. 22-23.

4

raisin requirements in 1944, the War Food Ad-

ministrator, on June 1, 1944, announced grower

support prices on natural condition raisins of

$180.00 per ton for Thompsons and Sultanas, and

$195.00 per ton for Muscats. These support

prices were fixed at the same levels as the ceiling

prices established by the Office of Price Adminis-

tration on grower or producer sales of natural

condition raisins. In order to enable packers to

pay such prices to growers and still secure

reasonable profits on the resale of processed

raisins, respondent entered into a program of

subsidy payments to packers. All growers of

raisin variety grapes, including petitioners, were

thus assured of obtaining the ceiling prices for

the naturai condition raisins they produced from

their grapes (R. 44-47).

In addition, since utilization of raisin variety

grapes, as before, for purposes other than for raisin

production—principally for beverage and table

uses—would have meant a shortage for the es-

sential raisin use, regulation of their disposition

and use became necessary. Accordingly, on July

20, 1944, the War Food Administrator issued —

Amendment 5 to War Food Order 17 (9 F. R.

8768) ,* placing restrictions on the sale, delivery,

purchase, and use of the 1944 crop of raisin

variety grapes and Zante Currants (R. 47-

51, 64-65). The order imposed no limitation

* This order is set out in the Appendix, infra, pp. 23-29.

5

on the conversion of raisin variety grapes into

raisins by sun-drying, or on sales to dehydrators

for such conversion, but, except as hereafter in-

dicated, it did not permit any other disposition

of raisin variety grapes by the grower. This

restriction was designed to ensure that grapes

would be devoted to raisin uses to the maximum

extent possible (R. 63, 64-65).

It was recognized that there would be some

raisin variety grapes which, either because of

their condition or for other reasons, would not be

converted or convertible into raisins. To permit

the unrestricted sale of that residue, however,

would have involved danger of diversion of grapes

actually needed for raisins. Section 1407.2 (b)

(1) of War Food Order 17, accordingly, per-

mitted the sale of such grapes only to the Office

of Distribution of the War Food Administration

or to a corporate agency thereof, such as respond-

ent. Thus, though an outlet was provided for

growers, control was maintained over the disposi-

tion of grapes for non-raisin use (R. 63-65).

A grower, therefore, had three principal legal

alternatives under the Order:

(1) to convert his grapes into raisins and to

sell them in that form;

(2) to sell them to a dehydrator for conversion

into raisins; or

(3) to sell them to the Office of Distribution.

ee ee

ne

. To provide the third outlet mentioned, respond-

ent undertook to purchase from growers who

could not or did not wish to utilize either of the

first two outlets: (a) raisin variety grapes not

suitable for conversion into standard quality rai-

sins; (b) damaged or substandard quality raisins;

and (c) such quantities of raisin variety grapes

as might be produced in excess of the amount

determined by the War Food Administration to

be needed for conversion into raisins (R. 63-64).

Under the purchase program, growers, including

petitioners, who wished to dispose of their grapes

other than by sun-drying into raisins or by sale

to dehydrators, made application to the War

Food Administration Office in Fresno, Califor-

nia. If the War Food Administration approved,

the applicant grower went to the office of respond-

ent’s agent and there signed the standard contract

(R. 9-22); all growers who sold to respondent,

including petitioners, followed the same proce-

dure and signed identical contracts (R. 62-71).

Respondent entered into over 2,000 such con-

tracts with growers. Only one contract was

signed with each grower; it covered all the grapes

he was to sell to respondent, regardless of whether

they included one or more varieties. Approxi-

mately 12% of the contracting growers sold Sul-

tanas, 27% sold Thompsons, and the remainder

sold Museats. The prices paid to the growers

was $43.00 per fresh ton for Thompsons and Sul-

tanas, and $50.00 per fresh ton for Muscats, the

equivalent, an a conversion basis, to the O, P, A.

ceiling prices for grower sales of natural condition

raisins of the same variety, and ta the highest

prices paid by dehydrators and dry-yard opera-

tors for fresh grapes sold to them (R. 72-79).

Respondent resold the grapes which it pur-

chased under these contracts, principally to win-

eries, at prices in excess of those it paid for

them. Resales were made on the basis of bids

solicited and received by respondent, and bidders

had no knowledge of the quantity of each variety

available for resale, The bids received showed

no substantial difference in demand (either on a

price or a quantity basis) among the several vari-

eties of grapes so resold, winery bids for Muscats

averaging not more than $5.00 per ton higher than

for Thompsons; and, so far as quantity was ¢ean-

cerned, the demand for Musecats was only slightly

greater than that for Thompsons. From these

resales of grapes, respondent realized net proceeds

of approximately $8,850,000.00 (R. 74-77). These

proceeds constitute the fund referred to,in Seetiop

5 of the contraet (R. 13-15), with reference to

whose disposition the principal issues here arise,

2. The necessity for the 1944 raisin program.

The war neeessity for imposing these restrictions

on the disposition and use of raisin variety grapes

arose from the following circumstanees;

Prior to the institution, in 1942, of Govern-

ment war controls on the disposition of raisin

743903—47_8

variety grapes, there was no large or consistent

difference in the prices paid for such grapes by

various trade outlets and for various uses.

Prices varied from year to year, by variety and

by utilization, but the maximum variation among

varieties and utilization in any one year never

exceeded about $5.00 per ton and averaged con-

siderably less (R. 51-54). With the imposition

of controls in 1942, the quantity and proportion

of such grapes going into non-raisin channels

was reduced (R. 58-59), and, as a result, grapes

sold for non-raisin use could command substan-

tially higher prices than those paid for raisins

(on a conversion basis) or for grapes sold to

raisin channels (R. 60-61). On the other hand,

the ceiling prices on natural condition raisins

were limiting factors, as a practical marketing

. proposition, both on the returns which growers

could realize for drying their grapes and on the

prices which dehydrators and other purchasers

were willing to pay for grapes acquired for con-

version into raisins (R. 72-73). Thus a large

disparity arose and could reasonably be antici-

pated between the returns obtainable by a grower

who converted his grapes into raisins or who

sold them for such conversion, and the return

which could be obtained for sales to non-raisin

outlets (R. 61-62).

This disparity, if ignored, would have encour-

aged the diversion of grapes from raisin to non-

raisin uses and would have prejudiced a grower

whose grapes were utilized for the essential raisin

use as against one whose wartime grapes were ulti-

mately diverted to the less important uses (R.

65-66). These two related factors created a very

serious problem in connection with the operation

of the 1944 raisin program, for that program

necessarily depended on the avoidance of pre-

cisely such a diversion. The problem was dis-

cussed at Government and trade conferences held

in Washington, D. C., and Fresno, California,

during the spring and summer of 1944, and the

Raisin Industry Advisory Committee recom-

mended as a remedy that any proceeds derived

by respondent from the resale of grapes acquired

from growers should be pooled and distributed

equally among all growers, in proportion to their

production of grapes. When it made this recom-

mendation, the Committee specifically rejected a

proposal by a Muscat grower that the profits on

the sale of each variety of grapes be kept in a

separate pool and be distributed only among

growers of that particular variety. (R. 61-62).

This rejected proposal is in substance the equiva-

lent of petitioners’ interpretation of Section 5

of the contract. }

Against this background, the War Food Ad-

ministration and respondent approved and

adopted the purchase program and the provisions

of Section 5 of the contract. The common pool

10

feature was designed: (a) to avoid a situation in

which it would be relatively disadvantageous for

a grower to dispose of his grapes (or Zante Cur-

rants) in raisin channels; (b) to eliminate any

financial incentive to divert grapes from raisin

channels; and (c) to avoid the possibility that a

grower of raisin variety grapes whose grapes

were devoted to the essential raisin use would

derive a smaller relative financial return than

one whose grapes were devoted to a less im-

portant non-raisin use, in consequence of the

market price differential favoring non-raisin

uses (R. 65-66). Since all proceeds were to be

pooled and distributed ratably among growers

‘in proportion to production, a grower would

neither gain nor lose by drying his grapes, as

War Food Order 17 contemplated. He would

therefore have no incentive to divert his grapes

from the essential raisin use and could derive

no artificial windfall from such diversion.

Section 5 also provides that the proceeds in

the fund shall be first applied to the incentive

payment to producers of sun-dried raisins, of

$10.00 for each ton of sun-dried raisins produced.

This provision was adopted as part of the co-

operative effort to secure the maximum conver-

sion of grapes into raisins by sun-drying (R. 65),

the additional labor and expense of sun-drying

and the possibility of loss or damage due to haz-

ards in the drying process (R. 42) being factors

il

which might have discouraged sun-drying, had

this compensatory provision not been included.

As previously indicated, all growers who sold

grapes to respondent did so only after first apply-

ing to the War Food Administration and then

signing the standard form contract (R. 64). All

of them followed the procedure described at R.

67-71. All growers, including petitioners, who

signed the contracts have made application for

payment of the purchase prices for the grapes

they sold to respondent and, with exceptions

not here material, all have been paid (R. 73-74).

In addition, the petitioners Pitts and Brown, who —

were eligible for incentive payments under the

contract, have applied for and received such pay-

ments (R. 78). Taking the program as a whole,

the incentive payments made up to June 2, 1945,

covered approximately 99% of the total eligible

raisin tonnage, and payments were still being

made at that-date (R. 77).

3. The proceedings below. The present case,

originally brought in the Superior Court of the

State of California, was removed to the United

States District Court for the Southern District of

California (R. 28-29). The case was then argued

and submitted on the complaint (R. 2-24), the

answer (R. 31-41), and the Stipulation of Facts

(R. 41-103). On November 1, 1945, the District

Court, per Yankwich, J., handed down a com-

prehensive opinion (R, 105-142, 63 F. Supp. 386),

een te er ee ee

12

holding that the contracts in question were valid

and did not violate petitioners’ constitutional

rights; that the Section 5 fund should be paid out

according to the common pool method of distribu-

tion; that the Muscat growers were not entitled to

have that portion of the fund derived from the sale

of their grapes distributed to them as a separate

pool; that petitioners, having entered into agree-

ments for the sale of their grapes, and having there-

after accepted benefits thereunder, could not ques-

tion the validity of those contracts. Judgment

dismissing the complaint was accordingly entered

on November 23, 1945 (R. 143-145).

Petitioners thereupon appealed to the United

States Court of Appeals for the Ninth Circuit

(R. 145-146), and on January 28, 1947, that court

announced its per curiam opinion (R. 155-157),

and entered a decree (R. 157) affirming the judg-

ment of the District Court. The Circuit Court

adopted Judge Yankwich’s opinion, and, as an

additional reason for affirmance, noted that. re-

spondent had recognized and fully compensated

petitioners for the difference in value between the

Muscat and other grape varieties, by paying peti-

tioners and the other Muscat growers $7.00 per

ton more for their grapes (R. 156).

ARGUMENT

The decisions below are clearly correct. Nor do

they conflict with any prior decisions of this

Court, as petitioners suggest (Pet. 6). To the

13

contrary, the constitutional question sought to be

raised here was decided unequivocally and ad-

versely to petitioners, in United States v. Rock

Royal Co-operative, Inc., 307 U. 8. 533. Review

by this Court is, therefore, not warranted.

1. It is plain that Section 5 of the contract in-

volved here (R. 13-15; infra, pp. 22-23) contem-

plates distribution of the proceeds derived from

the resale of petitioners’ and the other growers’

grapes on a common, rather than on a separate

variety pool basis. As Judge Yankwich put it,

‘“‘Kither Section 5 of contract means this or it

means nothing else’ (R. 121; 63 F. Supp. at 392).

The provisions for distribution are quite definite,

The distinction between grape varieties is recog-

nized only for one purpose, so far as distribution

of the surplus fund is concerned: different conver-

sion factors are established for grapes sold to de-

hydrators for each variety to take account of the

difference in weight loss encountered by the several

varieties in the drying process (R. 15). In all

other respects, the grapes, whatever their variety,

are treated as a single class, and there is not the

faintest suggestion in Section 5 of any intention

to segregate the proceeds derived from resales of

each variety into separate funds.

Moreover, several extrinsic facts show that the

common pool interpretation is entirely in accord-

ance with intention and purpose. A proposal

made by a Muscat grower that a separate fund

ca Me Ar enatnne degree

1 oman

0 Meena ma AS cons HS 08 ar

14

be created for éach variety was rejected by the

Industry Advisory Committee (R. 62). The at-

nouncement made by the War Food Administra-

tion describing the 1944 raisin progtam (R. 90-

92) states that grapes purchased would be resold

to the best advantage of “‘producers” and that the

‘net sales proceeds’’ would be distributed ‘‘among

faisin variety grape producers affected by the

order.’ Further, a grower shares in the pool

regardless of whether he sold his grapes to ap-

péllee or sun-dried all of them; petitioners con-

cede this (Pet. 10-11, 16-17). Consequently, un-

der petitioners’ interpretation of Section 5, as

between a Muscat and a Thompson grower, each

of whom sun-dried all of his grapes, the Muscat

grower would receive a larger distributive share

of the proceeds, quite apart from the $7.00 pre-

mium originally paid to him upon purchase by

respondent—despite the fact that no part of the

proceeds of the surplus fund was derived from a

resale of the grapes of either of these two growers.

There is obviously no rational basis for such a

result.

2. The common pool method of distribution pro-

vided by Section 5 of the contract involves no

deprivation of property and raises no substantial

constitutional question.

a. Since raisins were an essential item of food

in meeting military and civilian wartime needs,

the War Food Administration, acting under Ex-

ecutive Order 9280 (7 F. R. 10179) and Executive

15

Order 9334 (8 F. R. 5423) (which delegated to

it the allocation authority of the President under

Section 301 (a) of the Second War Powers Act,

March 27, 1942, c. 199, Tit. III, § 301, 66 Stat.

177; 530 U. S. C. App., Supp. V, 633), was clearly

justified in prohibiting the sale of raisin variety

grapes for non-raisin usé, thus securing an ade-

quate production of raisins. The restrictions im-

posed by War Food Order 17 were therefore well

within the war power of the United States and

plainly constitutional. Highland v. Russell Car

& Snow Plow Co., 279 U. S. 258; L. P. Steuart

é& Bro. v. Bowles, 322 U.S. 398.

b. Moreover, as the District Court found (R.

130, 135-136; 63 F. Supp. at 396, 399-400), sinee

the Government’s program assured petitioners at

least the equivalent of the ceiling prices for their

grapes, it caused them no injury and involved no

deprivation. And constitutional protections are

not impaired by action which produces no injury.

Gorieb v. For, 274 U. 8. 603, 606; Plymouth Coal

Co. v. Pennsylvania, 232 U. 8. 531, 544-545;

Currin v. Wallace, 306 U. S. 1, 18. Petitioners

lost, at most, an Opportunity to obtain an addi-

tional profit through the non-permissible diversion

of grapes from raisin use to less essential non- ~

raisin uses. Injury cannot be found in that cir-

cumstance. Cf. Ruppert v. Caffeg, 251 U.S. 264;

Perry v. United States, 294 U. S. 330, 357, 358;

Nortz v. United States, 294 U. S. 317, 330.

aOR OL ae 0

16

c. Nor do any due process considerations support

petitioners’ objections to the common pool method

of distribution. United States v. Rock Royal Co-

Operative, Inc., 307 U. 8. 533. There, in order

to meet the problems arising from the facts that

milk commanded different prices for different

utilizations, fluid milk being the most profitable

outlet, and that, in consequence, there was sharp

competition in the fluid milk market which itself

tended to drive prices down, the Government’s

order provided for a pooling of returns, so that

all producers ultimately received uniform prices

for their milk regardless of the uses for which

it was sold. This equalization pool was attacked

on due process grounds, the defendant objecting

to it as an ancillary feature of the minimum price

regulation. In sustaining the validity of the pool

against defendant’s contentions, this Court said

(307 U. S. at 572, 573):

* * * The pool is only a device rea-

sonably adapted to allow regulation of the

interstate market upon terms which mini-

mize the results of the restrictions, * * *

Common funds for equalizing risks are

not unknown and have not been considered

violative of due process. The pooling prin-

ciple was upheld in workmen’s compensa-

tion, bank deposit insurance, and distribu-

tion of benefits in the Transportation Act.

* * * Tn this case, the pooling has

differentials to cover the variations of

quality and location. [Italics supplied. ]

17

We submit that the Rock Royal case is com-

pletely dispositive of the constitutional issues in-

volved in the present proceeding.’ In both cases,

in order to aid'in effectuating a valid restriction

and to mitigate the inequitable incidents thereof,

a pool was created so that all producers would be

treated alike., In both, fortuitous advantages

were eliminated. There, as here, particular pro-

ducers lost the benefits of the additional profits

they might have made through sales to more

profitable outlets. A device which can be validly

adopted in aid of industry stabilization in peace

is surely not less available in aid of the allocation

power in time of war. See, also, Noble State

Bank v. Haskell, 219 U.S. 104; New England

Divisions Case, 261 U.S. 184; Dayton-Goose Creek

Ry. Co. v. United States, 263 U.S. 456, 484; Car-

michael v. Southern Coal Co., 301 U. 8. 495, 521.

And ef. Mulford v. Smith, 307 U. 8. 38; Wickard

v. Filburn, 317 U. 8. 102.° ’

* Thompson v. Consolidated Gas Utilities Corp., 300 U. S.

55, and Railroad Retirement Board v. Alton R. Co., 295

U. S. 330, notwithstanding petitioners’ suggestion to the

contrary (Pet. 6), are no more in conflict with the decisions

below in this case than they were with this Court’s ruling in

Rock Royal, where they were clearly distinguished. See

307 U. S. at 573.

*In Wickard v. Filburn, 317 U. S. 111, 181, 138, this Court

said:

“* * * We can hardly find a denial of due process in

these circumstances, particularly since it is even doubtful that

appellee’s burdens under the program outweigh his benefits.

It is hardly lack of due process for the Government to regu-

late that which it subsidizes.

* * * tJ * *.

Footnote continued on next page.

BOS nt OT EARNER:

ei iepeenasee

18

3. In any event, as the District Court held (R.

130-133; 63 F. Supp. at 396-398), petitioners

have no standing to maintain this action. They

made application under War Food Order 17 for

permission to dispose of their grapes other than

by the permissible courses of sun-drying or sale

to raisin channels. They were all then authorized,

under the order, to sell their grapes to respondent.

The approval of such sales opened to them a

legally permissible alternative outlet, under the

order, for grapes which they could not or did not

wish to move into essential raisin channels. They

utilized the outlet so made available to them by

contracting with and delivering their grapes to

respondent. Having made application under the

order, having relied on its provisions, and having

accepted the benefit of the approval thereunder

of a non-raisin outlet for their grapes, petitioners,

on well-established principles, may not now attack

its validity. Moor v. Texas & N. O. R. Co., T5

F. 2d 386 (C. C. A. 5), appeal dismissed, 297

U. S. 101; American Bond & Mortgage Co. v.

United States, 52 F. 2d 318 (C. C. A. 7), certio-

rari denied, 285 U. S. 538; North Dakota-Montana

Wheat Growers’ Association v. United States, 66

F. 2d 573 (C. C. A. 8), certiorari denied, 291 U. S.

“x * * That appellee is the worse off for the aggregate

of this legistation does not appear, it only appears that, if he

could get all that the Government gives and do nothing that

the Government asks, he would be better off than this law

allows. To deny him this is not to deny him due process of

law.” [Italics supplied.]

672; Wall v. Parrot Silver & Copper. Co,, 244

U. 8. 407; St. Lowis Co. v. Prendergast Construc-

tion Co., 260 U. 8. 469; Hurley y. Commission of

Fisheries, 257 U. S. 223; ef. Booth Fisheries v.

Industrial Commission, 271 U. 8. 208, 211; United

States v. Golden Gate Bridge & Highway Dis-

trict, 37 F. Supp. 505 (N. D. Calif.), affirmed,

125 F. 2d 872 (C. C. A. 9), certiorari denied, 316

U. S. 700. Actually, had petitioners made no

specific application under War Food Order 17,

their entry into the contracts with and deliveries

of grapes to respondent, as permitted by Section

1407.2 (b) (1) of the order, would itself have

constituted a complete election*to accept and to

proceed under the order. EZ. I. du Pont de Ne-

mours & Co., Inc. v. Hughes, 50 F. 2d 821 (C. C. A.

3); see also, American Smelting & Refining Co.

v. United States, 259 U. 8. 75; Morrisdale Coal

Co. v. United States, 259 U. 8. 188.

Contrary to petitioners’ contention (Pet, 19-

20), no duress can be implied from the cireum-

stances involved. That petitioners may have been

yielding to the economic need for finding an alter-

native outlet for their grapes, owing to their un-

willingness or inability to sun-dry them or to sell |

them to dehydrators, does not constitute unlawful

duress, as Judge Yankwich aptly noted (R. 134-

136; 63 F. Supp. at 399-400). Any such conten-

tion ignores the very basis of decision in cases

dealing with estoppels of this character. Moor

Se ear he

OA AGL? EERO ALE AOA stage A PS

APD ce Aa ne

20

v. Texas & N. O. R. Co., T5 F. 2d 386 (C. C. A:

5), appeal dismissed, 297 U. S. 101; American

Bond & Mortgage Company v. United States, 52

F. 2d 318 (C. C. A. 7), certiorari denied, 285 U. 8.

538; Yarnell v. Hillsborough Packing Company,

70 F. 2d 435 (C. C. A. 5); ef. American Smelting

& Refining Co. v. United States, 259 U. 8. 75;

Wh te Oak Coal Co. v. United States, 15 F. 2d

474 (C. C. A. 4), certiorari denied, 273 U. S.

756; Morrisdale Coal Co. v. United States, 259

U. 8. 188; EB. I. duPont de Nemours & Co., Inc.

v. Hughes, 50 F. 2d 821 (C. C. A. 3).

The real answer, of course, is that petitioners

are not in any sense rejecting the contract whose

validity they here impugn. They accepted it,

they proceeded under it, and they were paid for

their grapes under it; they now assert a right to

incentive payments under it and rely on it for

purposes of distribution of the proceeds. As this

Court said, in Z. & F. Assets Corp. v. Hull, 311

U. 8S. 470, 486:

But as their standing rests solely upon the

provisions of the Act, they may not escape

its terms or succeed in a challenge to pay-

ments for which the Act is found to pro-

vide.

CONCLUSION

The decision below is clearly correct and there

is no conflict. The constitutional contention is not

substantial. It is therefore respectfully submitted

21

that the petition for a writ of certiorari shvuld be

denied.

Grorce T. WASHINGTON,

_ Acting Solicitor General.

Peyton Forp, —

ing Assistant Attorney General. .

APPENDIX

1. Section 5 of standard form Government con-

tract entered into between petitioners and the

Commodity Credit Corporation reads as follows:

Section 5. Profits. The proceeds de-

rived by Commodity from the sales of

Grapes and Raisins purchased by Com- |

modity under this and similar Producers

Agreements with respect to Grapes and

Raisins produced in 1944 or converted into

Raisins in 1944 shall be used to defray the

cost of such Grapes and Raisins and inci-

dental expenses thereto, including but not

limited to inspection and transportation

costs and to pay the expenses: incurred by

Commodity or its agencies in the acqui-

sition and disposition of such Grapes and

Raisins and the remainder shall be dis-

tributed in the following manner and order

of priority:

1. An incentive payment at the rate of

$10 per ton shall be made to each Producer

of sun dried raisins (not including sulphur

bleached and soda bleached raisins) and

each Producer of Zante Currants for the.

quantity of such sun dried raisins and

Zante Daseenite produced in 1944 and sold

to Packers prior to March 1, 1945, pro-

vided, however, that if the available fund is

insufficient to make payments at the rate of

$10 per ton, such fund will be distributed

to such Producers on a pro rata basis.

2. The balance of the fund, if any, will

be distributed pro rata on fresh tonnage

basis to all Growers of raisin variety grapes

and Zante Currant grapes grown in 1944,

(22)

onl

fol:

zreen tons by dividing the price paid by

nmodity for a given lot by iaagiedt ory

ce in edule A at 79% moisture and

ltiplying that figure by the number of

1 t.

ndment 5 to War Food Order 17 (9

p88)» War Food Administration, is as

WFO 17 Amdt. Jury 20, 1944.

War Foop ADMINISTRATION

(WFO 17, Amdt. 5)

PART 1407—DRIED FRUIT

aisin Variety Gra Zante Currant

Grapes, Raisins, and te Currants

War Food Order No. 17, as amended,

#. R. 4321, 4319 (formerly designated as

od Distribution Order No. 17, as origi-

lly issued by the Secretary of Agriculture

24

on January 30, 1943, and as amended, 8

F. R. 1706, 12042), is further amended to

read as follows:

§ 1407.2. Restrictions relative to raisin

variety grapes. Zante Currant grapes,

raisins, and Zante Currants—(a) Defini-

tions. (1) ‘‘Person’’ means any individ-

ual, partnership, corporation, association,

business trust, or any organized group of

persons, whether incorporated or not.

(2) ‘*Director’’ means the Director of

Distribution, War Food Administration.

(3) “Raisin variety grapes’”’ means

Thompson Seedless, Muscat, and Sultana

grapes, grown in Fresno, Kern, ee

Madera, Merced, Stanislaus, San J:

or Tulare Counties in the State of ali-

fornia, in the fresh or partially dried form.

(4) **Zante Currant grapes’? means the

grapes of the Zante Currant variety, grown

in Fresno, Kern, Kings, Madera, Merced,

Stanislaus, San Joaquin, or Tulare Counties

in the State of California, in the fresh or

partially dried form.

(5) “Raisins’? means raisin variety

grapes preserved by the removal of a part

of the natural moisture, and includes such

ohm in the processed or unprocessed con-

ition.

(6) ‘Zante Currants’? mean Zante Cur-

rant grapes preserved by the removal of a

part of the natural moisture, and includes

pont sag in the processed or unprocessed

condition

(7) ‘‘Processing”’ means grading, sizing,

stemming, seeding, or treating raisins or

Zante Currants by the use of water, steam,

chemicals, or compressed or hot air.

(8) ‘‘Producer’’ means any person en-

gaged in the production of raisin variety

vesting or picking of such grapes.

in Go Neanineannb guebenning sadyamegeng

in the of processing and:

raisins or Zante Currants.

riety grapes or Zante Currant by

the use of artificial heat or by mn aevine.

(b) Restrictions. (1) No producer may

being limited to, any corporate agency

thereof), or (ii) any person designated by

the Director, or (iii) any dehydrator for

the purpose of converting such grapes into

raisins or Zante Currants. No producer

may, unless specifically authori nf the

Director, use more 100 pounds of

raisin variety grapes or Zante Currant

grapes during each calendar year for any

purpose other than for conversion into

raisins or Zante Currants.

(2) No person may, unless specifically

authorized by the Director, purchase or

accept delivery of any raisin variety grapes

or any Zante Currant grapes for any pur-

pose other than for conversion into Raisins

or Zante Currants.

(3) No person may, unless specifically au-

thorized by the Director, purchase, accept

delivery of, or use any raisins or an

Zante Currants for conversion into alcohol,

brandy, wine, any other beverage (whether

alcoholic or not), any concentrate, any

syrup, or any non-food product or non-

food byproduct.

SE

26

(4) No person may sell any raisins or

any Zante Currants for conversion into

aleohol, brandy, wine, any other beverage

(whether alcoholic or not), any concentrate,

any syrup, or any non-food product oy non-

food byproduct except to (i) the ce of

Distribution (including, but not being lim-

ited to, any corporate agency thereof), or

(ii) any person designated by the Director.

(5) On March 1 of each year each person,

other than a packer, shall, without regard

to existing contracts, set aside for delivery

to the Office of Distribution, or any person

designated by the Director, all of the un-

processed raisins produced in the then im-

mediately preceding calendar year, or

owned by or under contract to, such person

on said date, and hold such unprocessed

raisins so set aside for a period of one

year thereafter unless, during such period,

said unprocessed raisins are acquired by

the Office of Distribution or a person desig-

nated by the Director.

(6) No person may sell or deliver any

raisin variety grapes, any Zante Currant

grapes, any raisins, or any Zante Currants

with knowledge or reason to believe that

such quantity, or any portion thereof, thus

sold or delivered is to be used in violation

of this order.

(7) No dehydrator shall convert any

raisin variety grapes into raisins by any

method other than sun drying, unless spe-

cifically authorized by the Director.

(c) Audits and inspections. The Direc-

tor shall be entitled to make such audit or

inspection of the books, records and other

writings, premises or stocks of raisin va-

riety grapes, Zante Currant grapes, raisins,

and Zante Currants of any person, and to

'

(2) Every person subject to this order

shall, for at least two — (or for such

(e) Petition for relief from hardship.

. Any person affected by this order who con-

siders that compliance herewith would work

an exceptional or unreasonable hardship on

him may file a petition for relief with the

Order Administrator. Such petition shall

be addressed to Order Administrator, War

Food Order No. 17, Fruit and Vegetable

Branch, Office of Distribution, War Food

Administration, Washington 25, D. C. Pe-

tition for such relief shall be in writing and

shall set forth all pertinent facts and the

nature of the. relief sought. The Order

Administrator may take any action with

reference to such ition whieh is con-

sistent with the authority delegated to him

by the Director. If the petitioner is dis-

satisfied with the action taken by the Order

Administrator on the petition, he shall ob-

tain, by requesting the Order Administra-

tor therefor, a review of such action by the

28

Director. The Director may, after said

review, take such action as he deems a ee

priate, and such action shall be final. e

rovisions of this ph (e) shall not

construed to deprive the Director of

authority to consider originally any peti-

tion for relief from hardship submitted in

accordance herewith. The Director ma

consider any such petition and take suc

action with reference thereto that he deems

appropriate, and such action shall be final.

(f) Violations. Any person who violates

any provision of this order may, in aceord-

ance with the applicable procedure, be pro-

hibited from receiving, making any de-

liveries of, or using the material subject to

priority or allocation control pursuant

to this order. In addition, any person who

wilfully violates any provision of this order

is guilty of a crime and may be prosecuted

under any and all applicable laws. Fur-

ther, civil action may be instituted to en-

force any liability or duty created by, or

to enjoin any violation of, any provision of

this order.

(g) Delegation of authority. The admin-

istration of this order and the powers

vested in the War Food Administrator, in-

sofar as such powers relate to the admin-

istration of this order, are hereby delegated

to the Director. The Director is authorized

to redelegate to any employee of the United

States Department of Agriculture any or

all of the authority vested in him by this

order.

(h) Communications. All reports re-

quired to be filed hereunder and all com-

munications concerning this order shall,

unless otherwise provided herein or in in-

structions issued by the Director, be ad-

dressed to the Dissetor of Distribution,

War Food Administration, Washington 25,

D. C., Ref. WFO-17.

(i) Effective date. This order shall be-

come effective at 12:01 a. m., p. w. t., July

21, 1944. With respect to violations, race

accrued, liabilities incurred, or RO

taken under said War Food Order No. 17,

as amended, prior to the effective time of

the provisions hereof, the provisions of said

War Food Order No. 17, as amended, in

effect prior to the effective time hereof

shall be deemed to continue in full force

and effect for the purpose of sustaining any

proper suit, action, or other

with regard to any such violation, right,

—— or appeal.

Note: All record-keeping requirements of

this order have been a ppbraved by, and sub-

sequent reporting an rd-keeping re-

quirements will be subject to the approval

of, Bureau of the Budget in accordance

with the Federal Reports Act of 1942.

(EB. O. 9280, 7 F. R. 10179; E. O. 9822, 8 F. R. 3807; B. O.

9834, 8 F. R. 5428 ; E. O. 9892, 8 F. R. 14783.)

Issued this 20th day of July, 1944.

ASHLEY SELLERS,

Acting War Food Administrator.

U. S. GOVERNMENT PRINTING OFFICE, 1947

SOR TRUS iY _