Brief for Respondent — United States v. Ruzicka

Supreme Court brief1946

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_ Supreme Court of the

Octroper Term, 1946.

py ore Ne B45” .

UNITED STATES OF AMERICA,

Negi Py ‘tiftoner,

Us.

' a!

“JOSEPH RUZICKA axn CHARLES RUZICKA, 101

. VIDUALLY, AND AS CO-PARTNERS, ‘Prapinc as SEELEY

. :- DAIRY, | | , .

aie , ay ; . Respondents,

Lh —

ON WRIT OF CERTIORARL TO THE UNITED STATES CIRCUIT COURT

OF APPEAIS FOR THE SEVENTH CIROUIT,

-BRIEF FOR THE RESPONDENTS.

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| | —

Ze Wintuiam Parker Warp,

a ‘ po * Attorney for Respondents,

Novcmbed, 1946. . ‘

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Question presented ..,...............005. watedeians

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Argument:

L. The handlers riimedice are by the terms of the

Be GUIS 6 5. « kdneccandcccecs's: asee

TI. The invocation of the equitable remedies was

_ improper in view of established equitable prac-

cluded a summary disposition ..............

CrraTions.

; Cases. ) :

American. Power & Light Co. v. S. E.-C., 325 U. s. 385: > ide

Addison v. _Holly-Hill;. SE a ee ‘eeke. ae

Beal y. Misevuri Pac. R. he. Corp, 312 U.S. 45. — |

Bridges v..Wixon, 144 F. 2d 927, reversed 326 U.S. 135 23

- Commonwealth v. Anthes, 71 Mass. 18 errr: Seer Ere ae

: Columbia Broadeasting Co. v. U.S, 316 U.S. 407....-° 22°

Chicago v: Fielderest Dairies, 316 U.S. 168... |

_ Estep v. U. S., 327 U. 8. 114..... Wn RKGw diate as esepecs, ae

Falbo v. U. 8, Nin eect eres

ranklin v. Alabama State Mills: iene Sicaed 232 ©

ae Ala. 637, 169 So. 295............ Wert pes Hens * 20

Geldatein v. Groesbeck, 42 F.. bari 19, rev. on other ;

nds, | 23 U. 8. 737:. 13

Hecht, Campane’ v. ioer 321 U. 8. 321...... Sako’ : 25

~H. P. Hood & Sons v. U.S, 07 U.S. 588 Ree ‘sees (12 S

— ‘Commerce Commission v. Jersey City, 329

| eR Pe ening Oe. SOE es Pere deste

% " INinois Commerce Conimission | v. Thommen, 318 U.S.

ME Uae Bhar da Cawas Vl Mecha kAwbA kd Aouad bikie 22

Locketly v. Phillips, 49 F opie. 513, affirnied 319... '*

a | ee Ss teens wb scave bie iseeuantee + eis 13

3 Lenroot v. Interstate Bakeries Corporation, 55 F.

Supp. 234, affirmed in | part, reversed in part, 146 ws

Se BR en eR gf in Coney er ee aera nCee 17, 26

Leonardo v. Leonardo, 145 F. 2d 849,

McClellan v. Cruland, 217 U. 8. 268. . ‘

‘

a ae!

7, |

~ Moore v. Ill. Central R. Co., 312 U.S 8.680... 64%.. leer”

Muller Dairies v. Baldwin, 274 N.Y. 8. 975, 242 App.

Div. 296 02... sere cece cece eee ese deen ees SS 20

Myers v. Bethlehem Corporation, 303 U. 8. 4 hav

Natural Gas Pipeling Co. v. Slattery, 302 U. 8. 300. vou Oe

People ‘v. ‘Bruner, 343 Tl. 146... .;., inde nateceeness ee

Queensboro Farms Products v. ‘Wickard att F. 2d 969. 18

Reconstruction Finance Corp. -v. Morley, 125 F. 2d

PEST e A pe Pee Fats RAN 7

Ream v, €allaghan, 42 F. Supp. 951, affirmed 136° F.

Auge Ror eu hives rer crise Pe ena. ee

. Southern Ry. Co. v. Walters, 284 U. Genes aq

Stark v. Wickard, 321 U.S. f henliatiaicpaer agers 18”

Seligmans v. U.S., 30 F. Supp. pe Ak ae EE EE

Sparf and Hansen v. U. S.,'156 U. S. +) Eee 19, 20

State v: Wright, 53 Mé. 328 ......00..0 0 .ccbece cues - 19

Stelle v. L. & N.-B. Co. 323 U. 8. 192...........44- «a2

Sunshine-Coal Co. ¥. Adkins, 310 U. S. railing

St. Joseph's Stock Yards Co. v: U. S., 298 U, Ss. 38” PRA.

Trustege of Village. of Sar: oga Springs earings eee

Gas, Electric Light, and Power Co.,/191 N. Y¥. 123,

— -83.N. E. 693, 18 L. R. A. (N.-S.) 713, 14 Ang, Can.

ey A SEE ee Be EO PE LET OY ELT Poet CET 20

‘Tunstall v. Brotherhood, 323 U. S. 210. rant’ ver ae

U..8.’v. Sugst, 243 Wed. 498. <0... 0.035. c. cee ees - @

U. S. v. Ruzicka, 152 F. BMD i. aos vicgives Ra Or .

U.S. v. Rock-Royal Co-gp,, 307 U, B98... 5,98, 08, 17

U. 8. v. Ranes, 48 F. WG MMT i.e eck c cries Seeaweue 14

U. S: v. Abilene & So. Ry. Co., 265 U. 8. 274...:.7.... 22

5 iv.

U. S. y.-Adler’s Creamery, 107 F. 2d 987

U. S. v. Adler’s Creamery, 110 F. 2d 482... oe | |

U.S. v. Alpha Portland Cement Co., 242 Fed. 978.. * 28

U. S. v. Baltisto, 2 Suntner | es re Sree ate 49

U. 8. v. Belt, 47 F. Supp. 239, vacated, ‘319 U. 8.521, “,

| qabatind MR OE Fs si os ac ES os Sd sd ce 26.

_ U.S. v. Detroit T. & S. Co., 200 U. 8. hae “26

U.S. #. LaVeene Go-op., 143 F. 2d 415:...... re

U. 8. v. Morgan, 307 U.S. 183....5: 6. :.es cece eens a

U. &. v, Morria, 1 Ourtia 88. 0200.66. 5. 0.c0ce vei 1D.

_U.S. v. Taystee Baking Co., 55 F. Supp. 490.......... -26...

U.S. v. Wrightwood Dairy, 315 U. $.110............ -¥

Wawa Dairy Farms v. Wickard, 149 F 2d 860...... 18°

Watson v. Missouri K..T..R. Co., 17'S. W. 2d 357.... 22

|. Wallace Corp. v. N. L. R. B., 323 U.S. 248 peed hayes y+ 22

‘Yakus v. U. 8, 321 U. S.414....... obae 2 co Near 22

. C ionatibedien Statutes and Order.

Agricultiaral Marketing Agreement Act of: 1937:

7U. 8. C. 608a We nas sh coe el ba Seek ees 2,9°

TU AO Oe h..6. oc ER ae oe

7 U. §. C. 608a' (8)..... 6 Ripe Crane ieee

‘- "9, BO; Glo (16) (A); 06525. 5.. . + 3,10, 14, 18

a ee ie OSS I... oo Lis ce . 3, 10,16

Constitution of the U. S., Article III, Sec. 1........ 19, 20 -

Constitution of the U. S., Fifth Amendment.......... a

_., Judicial Code and Judiciary :

Section 240,28 U.S. C. 347..,<....0050.0 4 paras

Section 24(1); 28 U. 8. C. 41(1).. SR ee eaweata 9’

RENO Teen, OUP ix My Oe aa ds 6 Wik Odo voc keldc'cu 1

‘Boction G18, OU. B. ©. O18... ioc occcc ccs cat?

——

. Vv’ , . :

Order 41, as amended of Secretary of a 6

Fed. Reg. 3130: ; ;

Secficn 941.7(b) (5) ..-.--. rey bie ae ae

Section 941.8(g) .......---- secon peproree tesa of, 26

Section 941 9(b) sanee “Ps Popes Core are re rrr Te 18

Railway. Labor Act:

" Sections 1, ét seq. 45 U. S. C. 151 et seq...:...... 14

Sections 3(p), 45 U:6.-C. 158(p).....: clic ee ‘cle ee

_ Selective Bervice Act of 1940, 50.U. S.C. App. 301 ° Sot

edna: jabeer es cette Seer eee 23

; ; Miscellaneous. — |

3 Blackstone’ 8 Commentaries hs ins hee iat i arid 16

Cooley’s Constitutional Limitations, Vol. 2, p. 863. 2

wad — Pe, GE ai oss ns diese ev ccapeene 16

Ae *

In THE ,

Supreme Court of the United States

Ocroper Tenat,, 1946.

Neale Sands 3 No. 54.

UNITED STATES OF AMERICA,

\ . Petitioner,

\ vs. .

JOSEPH RUZICKA AND CHARLES RUZICKA, INpI-”

VIDUALL Y¥, AND AS} | CO-PARTNERS, Trapine as SEELEY

DAIRY,

Respondents.

° \

; \

ON WRIT OF CERTIORARI TO THE UNITED STATES cIRCU IT COU RT

o APPEALS. FOR THE SEVENTH CIRCUIT.

‘\< BRIEF FOR THE RESPONDENTS. )

OPINION BELOW.

» The District Court did not render an opinion”but did

enter findings of fact, conclusions of law, order for judg-

ment and final judgment qs set forth in. the record (R.

117-123). The opinion off the Circuit Court of Appeals

‘ appears -in the record (Rt. 135-142) and is reported, 152

F. 28.167. - -

7 2 j

| JURISDICTION. |

. /

w ~ aD

“The order of the Circuit Court of Appeals reversing

the judgment of thé District Court was entered October

30, 1945. The order of the Circuit Court of Appeals de-'

nying the petition for réhearing was entered January

5, 1946. The petition for certiorari was filed on March

7, 1946 and ceftiorari was granted April 22, 1946. - The

jurisdiction of this Court is invoked under Section 240_

(a) of the Judicial Code, as amended by the Act of Feb- .

ruary 13, 1925 (28-U. 8. C., sec. 347). :

1. QUESTION PRESEN TED.

wer under’ thie Agricultural hartiling siedeilt

Act the Distri Ge -are divested’ of original jurisdic.

tion to, aljudicate a tiandler” st

efenses of law and of fact. year

STATUTE AND ORDER INVOLVED.

Pie ee

‘This action was instituted under srotinions of the Agri-

cultural Marketing Agreement Ac. of 1937 (50 Stat. 246, .

7 U.S. C. sec. 601 et seq.). The pertinent provisions are

as follows:

8a (6) The: several district courts of the United

States are hereby vested with jurisdiction specifically

to enforce, and to prevent. and restraim any person

from‘violating any order,. regulation, or agreement,

heretofore or hereafter made or issued pursuant to

this chapter, in any. proceeding now pending or here-

after brought in said courts. , e

; 8a (7) Upon the request of the Sicretiry of ert

oul it shall be the duty of the several district at-

torneys of the United Statés, in their respective dis-

tricts, under the directions of the Attorney General,

to institute proceedings to enforce the remedies and —

te collect the forfeitures provided for in, or pursuant

3 ‘ Ae

to, this chapter. Whenever the Secretary, or such

officer or employee of the Department of Agriculture -

‘as he may designate for the purpose, has reason to

believe that any handler has violated, or is violating,

the provisions of any order or amendment thereto

‘issued pursuant to this title, the Secretary shall have

power to institute an investigation and, after due no-

tice to.such handler, to conduct a.hearing in order to

determine the facts for the purpose of referring the

“~"jfiatter to the Attorney Gengral for appropriate ac-

tion, ; ey Pate

‘ 8a (8) The remedies provided for in this section

shall be in addition to, and not exclusive of, any of

the remedies or penalties provided for elsewhere in ° |

ihis chapter or now- or thereafter existing at law or

in équity.

' Be (15) (A) Any handler subject to an order may’

file u written petition with the Secretary of Agricul-

ture, stating that’ any such order or any provision of

’~ any such order or any obligation impdsed in connec- —

_. tion therewith is not in accordance, with law and pray-

. ing for a modification thereof or to be exempted there- -

from. He shall thereupon be given an/opportunity ~

for a hearing upon such petition, in accordance with

regulations made by the Secretary of Agriculture, .

- with the approval of the President. After such hear-

ing, the Secretary shall make a ruling upon the prayer

of stich petition which shall be final, if-in accordance

with law. fii ee Fed pebiee

3 8e (15)-{B) -The District Courts of the United

States (including the district court of ther United

States for the District of Columbia) in any district _

in which such handler is an inhabitant, or has his

principal place of business, are hereby vested with

_ jurisdiction in equity to review such ruling, provided

a bill in equity for that purpose is filed within twenty

_ days from the date of entry of such ruling. Service

of process in such ptaceedings may be had upon the.

Secretary by delivering to him ‘a copy of, the bill of

complaint. If the court determines that such ruling

“~

- 4 2,

Rae

_is not in accordance with law, it shall remand such

proceedings to thé Secretary with directions either *

_.(1) to make-such ruling as the court shall determine

° to be jn accordance with law, or (2) to take such

further proceedings as, in its opinion, the law re-

quires. The pendency of proceedings instituted )pur-

suant to this sub-section (15) shall not impede, hinder,

or delay the United States or the Secretary ‘of Agri-

culture from ee relief spursuant to section 608a

(6) of this title. Any proceedings, brought pursuant 7

to section 608a (6) of this title (except where brought

by’ way of counterclaim in proceedings instituted -pur- _

suant ‘to this subsection (15)) shall abate whenever

a final decree has been rendered in proceedings: be-

tween the same parties, and covering the same subject '

matter, instituted pursuant to this subsection (15). ;

~The adininistrative order involved is an executive order:

of the Secretary of Agriculture promulgated by virtue of

the Agricultural Marketing Agreement Act. -The order, i

commonly called Order 41, fixes the minimum prices to. be

‘paid by dairies .to farmers. for milk sold in the Chicago,

Illinois marketing’ area.’ Prices are deterniihed’ accord- «

ingly to quantity and. quality of sales of milk products.

~ The form. of Order 41 involved herein appears in full

in the record (R. “43-65). The pertinent sections of the |

Orde? under which. petitioners sought to collect monies

- from: respondents in the District Court¢is as follows (R.

61 62): j ail \ 2S

8 & Adjustment of Errors in Payments. When:

ever verification by the market administrator of | re- °

ports or payments of any handler discloses errors

made in. payments’ to the producer-settlement fund -

pursuant to. paragraph (d) of this section, the market

.. administrator shall promptly bill such’ handler for

“, any unpaid amount and such handler ‘shall, within 5:

days, maké payment to the market administrator: of

the. amount so billed. Wheneévér verification discloses

that payment i is due from the. market ee

a P nee inie i 5 -~ 4 a

to any handler, pursuant to ‘paragraph. (d) of this -

section, the market administrator shalJ, within 5 day 8,

' make such payment to such handler. Whenever veri-

fication by thé market.administrator of the payment

by a handler to any producer, for milk purchased or -

received by such handler, discloses payment to such*

roducer of less than is required by this section, the

handler shall make up such payment to the producer

hot later than ‘the time of making payment to pro-

ducers next following sych disclosure. - ~~» -

' made |by th

ation of the

‘follows (R.60) 2. * :

a Se ubtract not less than 4 cents nor more

than 5°cents to provide against the contingency of

. errors in reports and payments or of delinquencies in

payments by handlers.. The. ‘ebalt shall be known |

as the uniform price for milk ‘containing 3.5 percent

_butterfat received from producers at plants located

within the 70-mile zone.' 3

ertinent provision of: the Order offsetting ertors

employees of the agency supervising the oper- ‘

rder and-disputes over indebtedness is as:

’ The isinals in petitioners’ brief filed.in the Cireuit Court

of Appeals (Appellee’s Brief, p. 29) showed a reserve fund on

_ October 31, 1944 of $76,896. 16.

STATEMENT. eras Oa"

Since this matter is on appeal on the pleadings only a

review of the kind and contents of the pleadings is proper.

Other matters not contained in the record ofthe judicial -

progess, are not properlya statement of the case. é

_ A complaint was filed inthe District Court for the North.

ern District of Illinois (R. 3), and answer was-filed (R. 70).

Then supplemental complaint (R. 73) and answer thereto

followed (R\ 89). Both complaints may be treated as one

and both answers as one. All pleadings were verified.

The record of pleadings shows that- the pricing Order

involved became effective September 1, 1939; that since

at least that date the respondents operate a dairy in the

City of Chicago. Without prior administrative proceed-

ings either by the Secretary of Agriculture under Section §

8(a) 7 of pay Act or the respondents under Section 8(¢) 15°

of the the petitioner filed an action in the District

Court on September “15, 1942 alleging an indebtedness to *

the- equalization fund of the Order. Pétitioner alleged

‘“‘errors in payments * * * have been disclosed by an

‘ audit of the defendants’ books and records,”’ a billing for

indebtedness and non?payment (R. 6). The answer denied °

indebtedness, disclosure of errors and violation and pleaded

affirmatively that the audit was inaccurate (R. 70). No

violation of the Order other than indebtedness was alleged. °

. A supplemental complaint (R.°73) and answer thereto

(R. 89) were filed realleging and denying indebtedness for

a further period. An affirmative allegation that the billing

‘‘was based upon an erroneous, improper, incomplete and

inaccurate inspection or audit of the defendants’ accounts,

books, records and activities of their transactions’’ was

made. Another affirmative allegation, referring to the |

various administrative proceedings available, was made

setting forth that, no administrative determination’ was

made by the Secretary of Agriculture prior to the institu. ’

4 = \ a P

tion of the action (R. 94). ,_ |

Petitioner has referred to a petition by- respondents to

stay (R. 95) filed in the District Court. This petition was

never ruled upon and.was at the request ‘of’ respondents

and with the immediate consent of the petitioner before a

consideration of thé various motions by the District Couft =

withdrawn from the record (R. 108). Having been with-

drawxe the’ petition? is not properly a part of the. record,

either of the trial conrt or of.a reviewing court. McClellan. -

y. Carland, 217 U. S.- 268; Southern Ry. Co. v. Walters,

mUeim: .:\ t.

The District Court \granted. plaintiff’s motion for judg-

ment on the pleadings tering findings of fact, conclusions

of law and final judgment order (R. 117). No evidence has.

been submitted by petiti

initted to offer any eviden

Appeal was taken to the Cireuit Court of Appeals for

_ the Seventh’ Circuit. On etober -30, 1945. that' Court. re-

versed the District Court remanding the same: for trial,

holding that petitioner had to prove its allegations of in-

debtedness and that respondents could avail themselvés of

any legal or equitable defense ion the general powers

of the Court. Petitioner’s petition for rehearing was de-

; f

nied January 5, 1946 (R. 144). | sme

er, nor were respondents per-:

> Petitioner has by footnote (Petitioner’s Brief, p. 12) set. forth —

matters which are not properly-a part of the record nor matters

for judicial notice. Reviewing court sits in teview of record of |

_court below. MeClellan v. Carland, 217 U. 8. 268; Southern Ry.

Cov. Walters, 284 US. 190. F ‘

- SUMMARY OF. ARGUMENT.

e i i ‘ |- d . es <4 tod

By! the enactinent of the Agricultural Marketing Agree-

ment Act of 1937 the Congress did not divest the Federal

District Courts of original jurisdiction to determine con-

troversie between the government and handlers. The

sdurintatebiive procedure provided in the Act is cumulative

er in addition i the remedies prensa PY the Judicial

Code. am F i |

The ssitobcene a jurisdiction invoked under the hehe.

’

tural Marketing Agreement Act was improper in view of

the adequate remedy at law for the collection of an alleged

‘debt. OPENS ke x

| J Go ed

1 eee |

The material issues of fact raised by the pleadings pre- ,

cluded the summary disposition of the case by ‘use ) of

motion for judgment on the pleadings.

Tee

ARGUMENT. -

care

By the Enactment of the Agricultural Marketing Agree-

- ment Act of 1937 the Congress Did Not Divest the Fed-

eral District Courts of Original Jurisdiction to Determine

Controversies Between the Government an Handlers.

The Administrative Procedure Provided ig the Act Is

Cumulative or in Addition to the Remedies#rovided by *

the Judicial Code. |

The principal\ question before this Court is whether or

‘not the remedie of the administrative process provided

_by Sections 8 ¢ (15) (A)‘and 8 ¢ (15) (B) are cumulative

or in addition to the remedies provided by the judicial

~ code, 98 U.S.C. 41 (1), or ‘exclusive. .

Of initial impo¥tance in deciding that question |is the

Act itself. “7 3

1. <In chronological order, first appears a section \giving

‘to the Government general remedies of _enforcement of the

orders under the Act. This has no counterpart as to relief ©

for handlers, producers, or others who may claim to be >

_adversely affected by an order. Ui Sg . 7

_ Sa (6) The several. district courts of the United °

States are hereby vested with jurisdiction specifically .

to enforce, and to prevent and restrain any person

from violating any order, regulation, or agreement,

heretofore or hereafter made or-issued pursuant to

this chapter, in any proceeding now pending or here-

_ after brought in said courts. ;

2. ‘The next ‘provision chronologically, as if in clarifica-

tion of possible doubt of a theory of exclusiveness of the

prior section, states that the remedies provided are cumu-

lative and are in addition to such jurisdiction as would

exist under the judicial code:

8a (8) The remedies provided for in this section

shall be in addition to, and not exclusive of, any. of ~

the remedies or pénalticg provided for elsewhere in

this chapter or now or thereafter existing at law or

in equity. -

It will be noted. that the sicmndsibies ‘remedies section

. does not limit or direct the relief tobe obtained to any

one party or class. .The Government, the producers, the

handlers, and all others are thereby confirmed in their.

judicial remedies ‘‘ provided for elsewhere in this chapter

or now or thereafter existing at law or in equity.” 97 U.

§. C. 608a (8). Congress thereby expressly reaffirmed the .

rights of litigants to a judicial determination of ,their. con-

trdversies even as to present and future additional juris-

diction of courts both at law and in equity.

3. The third section with certain — sections

italicized is as follows: :

8e (15) (A). Any handler subject to an ole may

file a written petition with the Secretary of Agricul-

ture, stating that any such order or any provision of

any such order or any obligation imposed in. connee-

tion therewith is not in accordance with law and pray-

ing for a modification thereof or to be exempted there-

from. He shal! thereupon be given an opportunity

for a hearing upon such petition, in accordance with .

regulations made by the Secretary of Agriculture, with

the approval of the President. After such hearing,

the Secretary shall make a ruling upon the prayer of

such petition whieh shall-be final, if in ace ordance with

law.

~ 8c (15) (B). The District Courts of the United

, States (including the District Court of the United

States for the District of Columbia) in any district

in whieh such handler is an inhabitant, or has his .

ptineipal place 4f business, are hereby vested with

jurisdiction in equity to review such rulings, provided

- » bill in equity for that purpose is filed with}n twenty

days from the date of the entry of such ruling. .Serv-

ice of process in such proceedings may be ‘had upofi -

the Secretary by delivering to him a copy of the bill

of complaint. If the court determines that such ruling

is ‘not im accordance with law, it shall remand such:

proceedings to the Secretary with directions either.

(1).to make such ruling as the court shall.determine

to be in accordance with law, or’ (2) to take such fur-

ther proceedings as, in its opinion, the law requires.

The pendency of proceedings instituted pursuant to ~

this subsection (15) shall not impede, hinder, or delay

the United States or the Secretary of Agriculture from.

obtaining relief pursuant to section 8a (6) of this’ title. .

Any proceedings brought pursuant to section 8a (6)

of this title (except where brought by, way of counter-

claim in praceedings inStituted pursuant to this sub-

section (15) ) shall abate whenever @ final decree has

been rendered m proceedings hetween the same par- |

ties, and covering the same subject matter, instituted

pursuant to this subsection (15). Bor es

Zit Oe

Manifestly, the foregoing provisions must be construed

eithér as (1) containing an exclusive remedy which every

aggrieved handler ‘musf pursue in the first instance to

obtain relief, or (2) as granting a cumulative remedy which

and aggrieved handler may ignore if he desires relief -in

the jndicial forum. prise

/ This Court in an interpretation of these provisions held

that the District Courts are not divested of jurisdiction of :

controversies between handlers and the gove rnment. U. 8. =

v. Rock-Royal Co-op., 307 U. 8. 533.

In the Rock-Royal case” which, like the instant: case,

was an enforcement action by the Government against —

“handlers, this court in its initial consideration, of the Act

- recognized the jurisdiction of the courts for a judicial —

determination of a controversy. “3

12 _

‘‘The Government makes the point that none of the

'- defendants, all handlers, can object to thesé terms of_

_ the order.* * * Although three of the defendants can-

* . not complain of the benefits. conferred-upon coopera-

_ tives, for they. are cooperatives, the defendant Jetter

Dairy Company has standing to raiseYhe issue of

want of statutory authority.to except cooperative han-

idlers from payment of the uniform price.’’ U. S. vy.

Rock-Royal Co., 307 U. S. 533, 560. _ (Italies supplied.)

At the same time ‘this Court recognized the rights . of

handlers to raise anf issue in the judicial form, and to

defend an enforcement action such as involved in the-in-

stant case. A judij@al determination of ‘the issue resulted

‘in the enforcement action.

‘The defendants * * * contend that the bills include

in their computation milk plainly excluded’ by the

terms of the Order ® * * — ; eee

_ “*As the action of the handlers forms the ground for

the initiation of regulation under the Act and’ for

_ Classification, reports, caleulatien and payment under

‘the Order, we conclude that the milk -received. by

handlers for use in the area is the proper basis of

_.computation.’’ H. ?. Hood & Sons y. U. S., 307 U.S.

_ 588, 560. (Italies supplied.) ;

In Stark v, Wickard, 321 U. S. 288, this court upheld the

‘right of producers to enjoin unauthorized action by the

Secretary of Agriculture. The Court gave support to the

argument that the absence of any restriction as to parties

under the comulative remedies section did not operate

* to divest a party of his right to a judicial determination

of a controversy under the Act. The Court has granted

judicial relief to a producer complaining of the operations

of an Order. The Court said: i gi a Chuept

‘‘The Act bears on its face the intent. to submit many -

questions arising under its administration to judicial. -

«review. Sees. 8a (6), 8e (15), (A) and (B). It specifi-

cally states that the remedies specifically provided in

See. 8a are to be in’addition to any remedies now ex-

, er ol

“tating at law or equity. Sec. 8a (8). This Court has

heretofore construed the Act to grant handlers judi-

cial relief in addition to the statutory review specif-

‘jeally provided by See. Se 1), ooo

“*With this recognition ongress of the. applica-

“ bility of judicial review in ‘this fieid, it is not to be

lightly assumed that the silence: of a statute bars from

_ ’ the courts an otherwise’ justiciable issue.’ San v.

| Wickard, 321 U. 8. 288, 303, 309. %

~ To hold now that in a particular kind of controversy,

“as here involved, the jurisdiction of the District Courts

has been removed would be to contradict the express work-

ing: of the Act. The cumulative reniedies section of the Act

makes no exceptions as to particular kinds or class of con;

troversies or parties. to. controversies. As: Congress has

power to grant or withdraw jurisdiction of a particular con-

troversy in the absence of an express. limitation the courts

will be presumed to have. full. jurisdiction given under the

Judicial Code. Lockerty v. Phillips, 49 F. Supp. 513, af-

firmed 319 U. 8. 182. Jurisdiction being purely detutory,

it is from the very essence of our three- branch govern-

ment, to be jealously guarded against encroachments and

limitations. Goldstein v. Groesbeck, 42 F. Supp. 419, rev.

on other grounds 142 F: 2d 422, cert. den:, 323 U. S. 787.

Where Congress. by special act has removed jurisdiction,

such a limitation will be respected. /

“The determination of the Commissioner of In-,

“ternal Revenue with respect to any refund under this

section shall be final and no court shall hav¢ juris-

diction to review such determination.’ Seligmans v.

U. S., 30 F. Supp. 895. |

In the instant ease. the record reveals that yo prior ad-

ministrative action occurred. No determination of viola-

tion ‘or ‘indebtedness was made under the. administrative

process. The District Court was the initial forum.

14 : :

The administrative remedy provided by ‘Congress

_ broadens the right of handlers and affords by the very

- wording of the section an election of remedies.

“*Any handier subject to an order may file|a written

- petition with the Secretary of Agriculture * i ae

(15) (A). ( Italies supplied.) : =

Congress. 7 | pat One,

In.U. 8. v, Ranes, 48 F. 2d 582 (C. C. A. 9) the Court

stated: as | on Ute tay 4

‘See. 66 11 8¢ supra provides that ‘the. applicant —

may apply to the district court % * for. a review of

such order or decision of..the commission.’ ‘May’ jn

its ordinary. sense, means that which is permissive .

' not mandatory.” ’ SFE

~The wording has recently been the subject of litiga-

tion in this Court under practically the same point of ex-

haustion of administrative remedies.

In Moore v. Lil, Central R. Co., 3120. S. 630, this Court:

"In considering the failure to exhaust administrative rem:

edies under the Railway Labor Act. 45 U. S. C. 151 et seq.

said: ee — | ware

““* * * But we find nothing in that Act which pur-

ports to take away from the courts the jurisdiction

to determine a controversy. over a wrongful discharge

or to make ‘an -administrative finding a prerequisite

to filing a suit in court * * * It is to be notéd that the

Section pointed, out, See. 153(i), as amended in 1934,

provides no more than that disputes ‘may be referred

*-** to the-* * * Adjustment Board * * *’- Tt is signif-

icant that the comparable section of the 1926 Railway

Labor Act (44 Stat.-577, 578) had, before the 1934

_ amendment, provided that upon failure of the parties

_ to reach an adjustment a ‘dispute shall be referred to

the designated: Adjustment Board by the parties, or

by either party *-* ** This difference in language sub-

stituting ‘ may’ for ‘shall,’ was not, we think, an indi- . .

cation of a change of policy, but was instead a clarifi-

- eation of the. law’s original purpose. For neither the

-. original 1926 Act, nor the Act as amended in 1934 in-

dicates that the machinery provided for settling ‘dis-

putes was based on a philoséphy of legal compulsion.

On the contrary, the legislative history of the Railway

Labor Act shows a consistent purpose on the part of

: Congress to establish and maintain, a sysiem for peace-

. . ful adjustment and mediation voluntary i in its nature.

The District Court. and the Circuit Court of Appeals

properly decided that petitioner was not: required by

the Railway Labor Act ‘to seek adjustment of his con-

troversy with the railroad as a-prerequisite to suit

for wrongful discharge. thas : ss

~ In the Moore case the naite: sethine the aid of the Fed-

eral Court under the election of remedies theory was the

moving party, seeking initial relief: In the instant case

the government as moving party made its election of the

judicial forum and ‘now seeks to further elect or choose

for the handlers their forum re relief over the same con- —

troversy. :

The argument that if ‘‘shall’’ had been used, a handler

would perforce have to adjudicate all matters in the admin-

istrative ‘forum even though no controversy existed falls,

for if Congress had chosen’‘‘shall’’ the addition of ‘‘if the

handler feels eeritssiteall would have corrected the possible

confusion. a

9-9) 2 ee ties which i is now mieaht to be read into

the grant by Congress * * * is not se complicated nor

is English speech: so poor that. words were not easily

available to express the idea or at least to suggest it: —

After all, legislation when not expressed in technica!

terms is addressed_to the common run of men and is

therefore to be understood aceording to the sense of |

{

wee.

ar oe

the thing as an ordinary man has a right to. rely on

ordinary words addressed to -him.’’ Addison v. Holly,

Hill, 322 U.S. 60%, 617, 618.

Other sections of the Act nullify the vat ‘saaieted

by the Government. ‘The provision that the decree in the

enforcement action ‘‘shall abate whenever a final decree

has been rendered in proceedings between the same parties,

and covering the same subject matter, instituted” pursuant

” to this subsection (15),” 6 ¢ 15 (B);invites other incon-

sistencies and wrongs under the government’s suggéstion.

_ Abatement generally means a temporary cessation | sub-

pect to: revival. Story Kq. Pl. See. 304, 3 Bia. Comm. 301.

The cessation being complete, not partial, would hardly

be urged to apply for a mandatory injunction for monies -

allegedly due. The decree would never be final if the See-

-retary had: for example determined administratively that

no funds were due ‘fr om the handler although the original

decr ce in the enforcement proceeding mandatorily en-

joined non-payment of a substantial sum for no. judicial

review under 15 (B) ‘would follow the Secretary’ S. de-

; termination. \

Further, nowhere in the Act is any. restriction ‘placed

‘upon the government’ to prevent an enforcement of the .

mandatory: injunction such as granted in various District

Court cases and in ond Cireuit Court of Appeals case,

U.S. v. Adler’s Creamery,.110 F. 2d 482, for the payment of

monies allegedly due but denied, by the handler. Assuming

- a market ‘administrator contended a sizable sum of money

was duc from a handler he could. proceed to full collection,

under the government’ 8 theory, \ before - a determination

rT be made through th adminjstratiy e hearing on ap-

_And the Act not ahi permits but apy au-

ori ram collection of the detrees.

i pendepey:« of proceedings instituted pur-

= ER AS

~guant to this subsection (15) shall not impede, hinder,

or delay the United States or the Secretary of Agri-

eulture ***”’ 8 (c) (15) (B). (Italics supplied.)

To justify such a theory would disregard principles Ot

equity such as abhorrence of ‘forfeiture, and, balance of.

equities, as well as taking of property without due process

of law as guaranteed by the Fifth ‘Amendment to. the

Constitution. . Spies ne

Further, a claim of a sizable amount of monies would, —

as a practical’ business proposition, be ruinous to business:

standing and. credit, as well as cloud all real estate of a .

handler.' It is not for the courts to assume that litigant,

government or private, would yield ‘some . of its- rights

especially in serious contests where‘ as here the govern-,

ment contends a handler has not even ‘his day {in court.

ise No comparable stay of a collection of a decree or re-

straint of entry of a decree for money rests in the Act

— to give comfort to the theory of the Government. The

mere fact of the issuance of an injunction of, any sort:

- stigmatizes and injures the defendant: as having done or

threatened to do somé illegal or inequitable act of such

unusual nature as to justify the extraordinary relief of

injunction. “Lenroot. v. Interstate Bakeries Corporation,

55 F. Supp. 234, affirmed in part—reversed in part, 146.

F. 2d 325; Leonardo v. Leonardo, 145 F. 2d 849.

A further incongruous situation under the.Government’s

-theory will result in that even the enforcement decree does s<

not finally abate unless the controversy be ‘‘between the

same parties.’” -AM- enféreement actions are brought -in’ -

_ the name of the United States! while all review actions

1 Decree operates as a lien ‘on real estate equivalent to a state

court judgment. 28 U.S.C. 812, Reconstruction Finance Corp.

v. Maley, 125 F. 2d 131. pS ans ere

ADS. v.«Rock-Royal Co-op.. 307 U.S. 533; U.S. v. WrighPoood

i Dairy, 315 U.S. 110; U.S... LaVerne Co-op., 143 F. 2d 415.

18:

are against the personal name of the then acting Secretary

of Agriculture.?. (By virtue of a provision of the order

the ‘‘market administrator may nfaintain a suit in: his

own name against. any handler for the collection of such

~ handler’s prorata share of expense ." *-* 9? O419.:(b) (R.

62). "As to such a claim the parties again would not be —

» the same.) Possibly no termination would ever ‘be achieved

ae abatement hinged upon a “final ¢ decree” between the

same parties. het :

To correct all of these possible mistakes and errors an

4 assumption of practice, or future conduct or judicial con-

| * struction is required. The express wording of the statute /

clearly: solves all problems. bmperintety without strained / |

and ambiguous interpretatians.

While an “Act ‘and an order thereunder may - pass the

constitutionality tests as to A-particular section or pbrase

. ~ of the. ‘enactment, the operation: of that Act or order may :

' tion.

. not be proper. In the instant. Act the ‘operation can be

; constantly. challenged by litigants as being unconstitutional

“as ‘denial of due, process(@f law in the manner ve: opera-

‘Tf ‘the theory rena | by the. Gavernment herein

‘should be adopted, all qu tons concerning the operation

of the order are excluded { ‘rn the tenis and delegated. “.

to the administrative foranigfe r dete rmination. This in-

cludes all questions ‘of law viously an unconstitutional

delegation. ‘Under 15 (A) the handler who entertains a

controversy: ‘with the Government over an,order must take

his grievance to the ‘Secretary of Agriculture ‘‘* * * sfat-

ing that-such an ‘order. * © © ig not in accordance with law

eee This ‘questions of law would perforce be submitted

2 Stark v. Wickard, 321 U.S. 288 : Queensboro Farms Products

Wickard, 137. F. ‘td ad Wawa Dairy rigs v. Wickard, 149

F > 860. ae ; :

P \

to an administrative agency to the exclusion of the courts,

except on appeal.” YS ie ae | Ue

_ The Act continues “* * * after such a hearing, the

Secretary shall make a ruling upon the prayer of such

‘petition. which shall be final, if in accordance with law.” |

The Secretary is delegated thereby the task .of deciding

pure questions of law, The review section to correct

actions of the Secretary only exists to affirm or reverse

‘the legal ruling in ain appellate tapacity. Such procedure

*’ clearly is repugnant to the constitution. — ra

| In the case of People v. Bruner, 343 Ill. 146, the consti-

tutionality of a statate enacted iti 1827 was attacked This

-< eta ‘

Act provided that ‘‘ Juries in all cases shall be the judges

of the law and\fact.’’ The Supreme Court of Illinois,

following and adheririg to the decision of United States

; i, Battisto, 2 Sumner, 240, United States v. Morris, 1 Curtis —

. 23, and Sparf and Hansen v. Unated States, 156.U, S. 51,

held that at-common law a jury is dhe judge of facts and

not .of the law, and that th judiciary is the judge of: the

ee ade ae RR OCENET TE ae es ed Oa ae

. -, Seetion 1 of, Article Tl] of the: Constitution of the

\ United. States, vests the judicial power in a Supreme -

.. Court! and certain ‘subordinate courts. vs ne.

‘The Tlinois Supreme Court,’ at page 158-of the official

report of the Bruner case, defined ‘‘judicial power”’

thusly : panag ec ne

TS a MOO interpretation,.of Statutes, the determination

of ‘their validity, and the application of the rules and

principles of the common law, among others, are in- ©

— herently judicial. functians. The constitution ‘vested

, by it. (Commonwealth v. Anthes, 71 Mass. 185; State .

vy. Wright, 53 Me. 328.)”’ ea

At page 159 of the yofficial report, the Illinois Court

quoted at length from Jaxstice Harlan’s opinion in -the

ta.

‘these functions in the courts created and authorized .

‘ t 20 : :

case of Sparf and Hansen v, United States, 156 U. 8. 51,

“pages ‘101- 103 on the point that the Courts are the sole

judges of the law and to hold otherwise would cause the

utmost: confusion in the law:

The same confusion thus described by Justice Harlan

may. exist where an administrator or administrative board

is given the exclusive right to determine whether an

Order, or provision thereof, issued under the Agricul-

tural Marketing Agreement Act of 1987 is in ‘‘accordance

. with law.’’ He is given the right by Section 15A to deter-

mine what the law is or should be. That delegation of

judicial power to a member of the executive branch of. the

Government eycroaches upon and invades the powers of

the Court. and hence, ‘violates the provisions of Section 1

_of Article TIT of the Constitution of the United States.

Inthe case of United States v. Sugar, 243 Fed. 423, °

tistriet: Court Judge Tuttle (D. C. Mich.), discussed the

separation of powers in our government and noted ‘that

only the eourts may decide what the law is.

It has been held that it is not an unwarranted delegation

. of judicial power to allow a board in control of marketing. _

/ of milk to designate the limits of an area or to fix prices

therein. Franklin y. Alabama State Milk Control Board,

232 ‘Ala. 637, 169 So. 295. But whether a price fixed

amounts to a confiscation of private property can be deter-

mined only by the courts. Muller Datries v. Baldwin, 274

N. Y. S. 975, 978, 242 App. Div. 296. In the latter case,

the Snpreme Court of New. York, Appellate Division,

said:

“The fixing of prices, like the fixing of rates or

fares, is a legislative function. and here it was dele-

ented to the milk contro] hoard. Whether the prices

fixed by thé board amounted to confiscation of peti-

‘tioner’s property was a judicial question for the

courts. Trustees of Village of Saratoga Springs v.

Saratoga Gas, Electric Light and Power Co., 191 N.Y.

128, 83 N. E. 693, 18 L; R. A. (N, 8.) 713, 14 Ann. Cas.

606.”

Cooley’s Constitutional Limitations, (8 Ed.) Vol. 2, page

863, states that one ‘‘Cannot ‘be bound by a delegated

exercise of judicial power, whether the delegation ‘be by

courts or by legislative act devolving judicial duties on

ministerial officers.’’ Sey IONE BERT Ro ,

Under-the well known ‘rule that courts will uphold the

constitutionality of a statute wherever possible, the word

‘‘may’’ must be construed as permissive in. order to reach -

a conclusion of constitutionality, if such construction leads

to constitutionality. kee

To view the LaVerne case, LaVerne Co-op, Citrus As-

sociation y. U. S., 143 F. Qnd 415,.concerning which the

Cireuit Court of Appeals in the‘instant case announced

t a decision contrary to that was reached, reveals an

example of the unlawful delegation of authority resulting

“from a denial of judicial relief to handlers. The Cireuit

Court of Appeals for the 9th Circuit referred to the Secre-

tarmoof Agriculture for determination by him as’a matter

of law sueh purely legal and constitutional matters as

(1) deprivation of property without due process of law

violating the fifth Amendment, (2) irreparable injury, and

(3) arbitrary and discriminatory classification. Such mat-

. tere were patently for judicial cognizance. Tt may well

he econelnded that the decision of the Cirenit Court of -

Appeals in the La Verne case is in itself unconstitutional.

Other Acts of Congress which have been subrnitted to

tests and interpretations by the courta are of: little value —

for no other Act contains similar jurisdictional ‘authoriza- ;

tions to the judicial and administrative forum.

Most similar Act ie the Railway Labor Act, 45 U. 8. C:

151, ef seq., which offers an election of remedies -to an —

_ employee sustaining. personal injuries. There, as pre-

viously pointed out, the employee may proceed administra-

tively or judicially. Even if the administrative forum is —

selected the employee may file suit in court’ to. enforce an

order of the board and such action ‘‘shall proceed in all

respects as other civil suits. ” 45 U.S.C. 153(p).

: Watson v. Missouri K. TOR? C6, 17S. W. 2d 357.

; Tunstall v. Brotherhood, 323 U. 8.;210. Mire cone

Steele v. L. and N. R. Co., 323 U. S. 192.

The-other Acts of Congress under which administrative

process ensue generally may be divided into. two classes:

(1) those which, in creating ‘the administrative process,

make it the exclusive remedy,. and (2) those which are

silent as to the exclusiveness of the administrative process

or judieial review. .

-~1. As to those Acts expressly making the adnithintrative

process exclusive the courts have held litigants to that

. procedure. Yakus v. U. S., 321 U. S. 414; Myers v. Bethle-

~ hem Corporation, 303 U. 8. 41; Wallace Corp. v. N. L. R. B.,

323 U. S.. 248; Columbia Broadcasting Co. v. U. S., 316

_ U.S. 407; Interstate Commerce Commission v. Jersey City,

- 322 U. S. 503; Sunshine Coal Co. v. Adkins, 310 U. 8. 381;

Illinois Commerce Commission v. Thompson, 318 U.S. 675.

A line of cases construing such acts as make the adininis-

trative review exclusive still adheres to the ‘general juris-

diction of the District Courts under the judicial code. ‘Thus ..

in U, 8S. v. Abilene € So. Ry. Co., 265 U. s. 274, 282, this

Court said:

‘Despite the failure to apply for a rehearing, the

court had jurisdiction to.entertain this suit. * * *—

"Whether it would have denied relief until all possible

administrative remedies had been exhausted was a

matter which called for the exercise of judicial! dis-

cretion. We cannot say that, in denying the motion -

to dismiss, the diseretion was abused.’’

In that case the railroad was’the instigator of the action,

' selected the forum, then before exhausting the administra-

tive process, sought the jurisdiction of the District Court.

This Court reaffirmed the inherently judicial power and

discretion for relief." ce ;

Further support of the doctrine comes from the holding —

fy this Court that Congress cannot authorize a deprivation

of liberty without due process of law by the device of mak-

ing the fact findings of an administrative board conclusive

upon the courts. Bridges v. Wixon, 144 F. 2d 927, reversed

396 U.S, 135. There this Court held that the sole evi-

dence underlying the determination having been improperly.

| admitted, the finding was unfounded and the judiciary could

reverse the action of the board by rejecting the findings of

fact. pet Aiea 2 peea

2. As to statutes which are silent as to. the exclusive-

ness of the administrative process or do not provide for a.

judicial review the Selective Service Act of 1940, 50 UL S.C.

appendix, offered an opportunity for judicial interpreta-

tion. ? ;

Whe Falbo v. U. S., 320 U. S. 549, ease, holding that no -

_ judicial review was ‘available where Congress had not

authorized a review has been superseded by the recent

Estep v. U. S., 327 U. 8. 114, decided . by. this Honorable

Court. There the registrant exhausted his administrative

remedy, then, in a prosecution was allowed to defend on

the basis of lack of jurisdiction in the local board (adminis-

trative forum) by failure of the board to follow the rules

and regulations. - 3 eo

1See also Natural’ Gas Pipeline Co.'v. Slattery, 302 U. §..300 —

holding the granting of injunctive relief before exhaustion of ad-

ministrative remedy to. be within judicial diseretion. And see —

American Power & Light Co. Vv. 8, EB. C., 325 U. 8. 385, bolding

that any interested person may seek judicial review of a Seecuri-

ties & Exchange Cominission determination although not.a party

to that determination.

la a concurring ee: -the following ‘oncive doctrine

appears.

“* * * Before a person may be punished for violat-

ing an administrative order due process of the law

requires that the order be within the authority of the

administrative agency and that it not be issued-in such

a way as to deprive the person of his constitutional

rights. A court having jurisdiction to try such a case

‘ has a clear, inherent duty to inquire into these matters

so that constitutional rights are not impaired or de-

stroyed. Congress lacks any authority to negative this

duty or to commazid a court to exercise criminal juris-

diction without regard to due process of law or other

individual rights. To hold otherwise is to substitute

illegal administrative discretion for constitutional safe-.

guards. As this Court has previously said, ‘Under our

system there is no warrant for the view that the

judicial power of a competent court can be circum-

scribed by any legislative arrangement designed to give

" effect to administrative action going beyond the limits

* constitutional authority.’ St. Joseph's Stock Yards

Co. v. United States, 298 U. S.. 38, $2."

By reason of the express language of Congress granting

additional administrative relief at the handler’s election

and by reason of the resultant anconstitutional delegation

of judicial powers: under the forced construction urged by

the Government, the answer to the principal question of ,

this case is that the handlers’ remedies are cumulative. and

not exclusive.

ray)

prs eerie’ = a

The Enforcement Jurisdiction Invoked Under the Agricul-

tural Marketing Agreement Act Was Improper in View

of the Adequate Remédy at Law for the Collection of an

Alleged Debt. ' é,

A second important question is whether under the Act

the government properly sought injunctive relief for the

collection of monies allegedly Eee ea ea a

In spite of special grants of injunetive relief to. the

vovernment such extraordinary relief will be awarded only

upon fhe necessary showing under established “principles

of equity practice. j ; ; a i

‘A grant of jurisdiction to issue compliance orders

hardly suggests an absolute duty to do sov-under any

and all circumstances. We cannot but think that tf

Congress had imtended to make such a drastic de-

parture from the \traditions of equity practice, aD

unequivocable statement of its purpose’ would have

heentade—.° *. We are dealing here with the re-

quirements of equity practice with @ background ‘of

several hundred years history > * the: historic

injunctive process was designed to deter, not to punish |

*'* © We'do not believe that such a major. de-

parture frovs that leng tradition as is here- proposed

shod be lightly iniplied.*’ Hecht Company v. Bowles,

321 U. S. 321, 329.

In the foregoing casé an injunction under the Emer-

‘gency Price Control Act was denied the government. The

irstant case presents no express authorization from ‘Con-

vress for punitive action of an equity decree for colleetioni

‘of a debt. Since there is ‘no recourse by way of damages

_ against the United States in favor of a handler who, under

the government's interpretation of the Act, is subjected

to the deeree ‘in an enforceinent, proceedings while he

establishes the lack of a debt, all caution should be’ exer-

¢ised i in entry of a mandatory injunction. US. Vv. Taystee

Baking C 0., 55 F. Supp. 490, Lenroot v.- Interstate Bakeries

Corporation, 55.F. Supp. 234, affirmed in part and revered

in part, 146 F. 2d 325. Odi he

The fundamental doctrines of eqaity, irreparable in.

jury, balance of equities, he who seeks. equity must do

equity, equity. abhors a forfeiture and adequate * remedy

at law, all prevail for consideration by the chancellor as

strongly when the government seeks relief as a a

party. U.S... Belt, 47 F. rg th 239, vacated 319 U.

_ 521, affirmed 142 F.2d 761, UV. S. v. Detroit T. & L- a

200 U. 8. 321. |

The only actual relief sought by the government is the

collection of a disputed debt. Upon this theory the gov-

ernment coritends that the order, Order 41, was violated |

and extraordinary relief beyond all relief available to it

in courts. of law should be granted. An analysis of the

order involved indicates that some sixteen different oper-

ations or tasks are required of the handlers whereas the

only actual ‘‘violation’’ here involved ‘was the failure to

pay an additional amount to the pool beyond that which

the records of the dairy indicated was die and was paid.

The express wording of the order does not require pay-

ment within five days for. errors disélosed by certification:

of reports but only disclosed i in payments made.

“941.8(g) * * * Whenever verification by the

market administrator of reports or payments of any

. handler discloses errors made in.jayments to the pro--

ducer-settlement fund * * *.’’ (Italics supplied.)

Verification’ of both i is “provided but payment for errors

is limited.

There is. nothing i in the Act to vest in the market adminis.

trator a presumption of correctness in his and his aids” *”

27°

duties. Congress has not so changed the ruies of evidence as

to imbue the audit of the market administrator with even:

a rebuttable presumption of correctness and the defendants

in their answer affirmatively alleged the audit was er-

roneous, improper, incomplete, and inaccurate. (R. 71).

So strongly has Congress established the principle sof

withdrawal of equitable relief if an adequate remedy ‘at

law exists, the inherent principle has been, codified.

“Suits in equity shall not be maintained in any

. court of the United States in any case where a plain, —.

adequate and complete ‘remedy may be had: at law.”’

. 28 U.S. C. 384. ‘Judicial Code 267.

_ Chancery should not have been appealed to in tht instant

case until the government as an alleged creditor had ex-

-hausted all its remedies at law. An action of debt would

- suffice. Sound discretion of the chancellor in a controversy

of this type would have denied extraordinary relief. U.S.

v: Morgan, 307 U: S.. 183; Chicago v. Fieldcrést Dairies,

316: U. S. 168.

No ease under the Agriculturat Marketing Agreement

. Act has been decided on the issue of adequacy of the

> legal remedy for the collection of a disputed debt. In the first

Adler’s Creamery case; U. S. v. Adler's Creamery, 107 F. -

2d 987 in the Circuit Court of Appeals the court reiterates

the rule that usual equitable problems are still to be con-

sidered even under the enforcement section of the Act.

The second Adler’s Creamery case, U’. S. v. Adler’s Cream-

ery, 110 F. 2d 482, disposed of the contention that equity

could not be used to collect a debt past due. Where money.

alone is sought, equity jurisdiction is expressly removed

by the judicial code in favor of jurisdiction at law.’

The instant case reveals that a jury demand as to the trial

of the material issue of indebtedness remained unheeded

(R. 115). The harm to a handler is unwarranted.

Nien SASTALL t euby kes

III.

The Material Issues of Fact Raised by the Pleadings Pre-

° gluded the Sum Disposition of the Case by Use of

Motion For Judgment on the Pleadings.

Indebtedness being the gist of the controversy in. the

‘District Court the issue theréof required a trial according

to customary rules of procedure. - Complaints alleging ,

indebtedness and answers denying indebtedness ail verified

raised such a, triable issue of fact that the government’ 8

motion for judgment’ on the pleadings was improper. The

_ denials of the answers will be taken as true. Beal v. |

Missouri Pac. R. R. Corp.; 322 U. 8.45. U. S.v. Alpha

Portland Cement Co., 242 Fed. 978. ;

A mere denial sufficient will not be inquired - into:

Extraneous facts cannot be considered. Ream v. Callahan,

42 F. Supp. 951, affirmed 136 F. 2d 194.

‘The handier for the reasons stated should have been

granted a trial on the issues with opportunity for evidence

to be presented by the government and the handlers.

.The respondents respectfully submit that for the reasons

stated the judgment of the Circuit Court of Appeals should

be affirmed.

Wriuuiam Parker Warp,

er : Attorney for Respondents. ”

November, 1946.0 , pe

". We brought this case here, 327 U. S. 776, because it

‘raises questions of importance in the administration ~

- Act and its operation have been before us.in aj series

of cases. United States v. Rock Royal Co-op., on

go ta:

-! SUPREME COURT OF THE UNITED STATES

‘No. 54.—Ocroser TERM, 1946.

United:States of America, — |

' Petitioner, ie ’ Bs

ee Qn Writ of Certiorar: to

: ime | the United States Cir-

Joseph Ruzicka and Charles}. oyit Court of Appeals

Ruzicka, ‘Individually, and) for the Seventh Circuit.

as Co-Partners, Trading 2s Fae :

Seeley Dairy.

ieee UNS le oe

| Mr. Justice FRANKFURTER delivered the opinion of the

Court. Sr A

of the Agricultural Marketing, Act of 1937. - 0 Stat.

246, 7 U.S. C. § 601 et seq. The general scheme of the °

U.S.

533: United States v. Wrightwood Dairy Co., 3 U. S.

110: Stark v. Wickard, 321 U.S. 288. Our immediate con-

cern is with the provisions of the Act that distribute enforc-

ing authority between the courts and the Secretary of

“Agriculture. These become relevant to the enforéement

* of Milk Order No. 41, an “Order Regulating the Handling

‘ ‘of Milk in the Chicago, Illinois, Marketing Area”, and |

more particularly the portion of that. elaborate, Order -

which defines the rights and obligations of “handlers” of

milk. Section 941.1 (5): The Order was issued under the

‘powers delegated to the Secretary of Agriculture . to

effectuate the purposes of the Act. Section 8¢ of the

Act. 5 ; aE,

Order No. 41 classifies milk received into the Chicago

area according to its uses. “To milk in each of the four.

‘ : ¢

‘ ~

Pe tee ee MN eRe AP eS:

classes the market administrator assigns a uniform ve

value.” All handlers dre required to report tothe market

administrator the quantity of milk purchased and put tats

@lassified uses. On the-basis of these reports the adminis- |

- trator, taking into account the total quantity of milk pro-

diced and the amount devoted to each classification, as)

well.as the balance in the Producer-settlement Fund, and -

“making authorized adjustments, announces monthly a uni-

form luinimum. price to be paid by handlers to produc-—

ers. Since a handler’s receipts from the re-sale of milk,

or the sale of milk products, vary with the amount of the

_ milk distributed in each class, the uniform price paid: by

handlers will create inequities unless adjustment is made,

based.on the comparative use value of the milk distributed

. bya particular handler.’ The mechanism for adjustment is‘

the Producer-settlement Fund., Handlers are required to

contribute to this F und whenever the use value of the milk

handled by them during the month is greater than. the

norm on which the uniform price is based. . Conversely,

handlers whose milk distribution ts of low use value

and whose fixed minimum costs are therefore out of line

with their receipts, aré recompensed from this Fund. Ef- —

fective enforcement of such a marketing scheme rests on

‘proper accounting, reliable reports and’ alert inspection.

At best, however, errors are inevitable, which may call for —

payments by handlers into,the Fund. The reliance of

the industry. upon that Fund makes prompt payments into”

it imperative.”

An order for payment into the F und ‘and its résistanes

led to this litigation. The Ruzickas, handlers of milk,

filed with the market administrator required reports and

received from him a transcript of their account with the: ~

Fund for the period i in controversy. Deficiencies were dis-

closed which the Ruzickas refused to pay, in disregard of.

§ 941.8 (e) aad. (g) of Order 41 requiring a handler to pay —

: within five days™the amount so billed”. Under § 8a (6) ;

° 8 gu ° . | pte ods

{ UNITED'STATES v. RUZICKA’ soebuas ]

UNITED ST: ATES v. RUZIC KA. 3 3,

_ of the Agricultural Markéting Agreement Act this suit was

begun in the Northern District of Illinois for enforcement.

The Government prayed for a mandatory injunction

commanding compliance with Order 41 by payment of

the sums alleged to be due to the Fund. If it be relevant,

it was not alleged that there was danger of irreparable loss

because of insolvency of the Fund. By their answer

the Riuzickas’ justified‘ ‘their failure to pay, chiefly on

the ground that the démand. was based upon faulty i inspec-

tion of their accounts and improper tests of their milk and

‘milk products. The District Court ruled that “the defend-

ants having failed to avail themselves of the administra-

‘of fact before this “Court”. - On the issue in the suit thus

limited, the District Court granted the Government's mo-

- tron for judgment on. the pleadings. The Circuit Court of -

Appeals for the Seventh Circuit, one judge dissenting,

reversed the District Court, ruling that the validity of the

demand by the Secretary of Agriculture may be contested

i rm enforcement proceeding under § 8a (6). 152 F. :

d 167. : ?

Thus the question before us is whether ‘a rinses may

aati a claim against him by the Secretary of Agriculture,

made according to the procedure defined in the Act, with-

out previously having sought to chiallenge the claim in a

preceeding, also defined in the Act, before the Secretary of

Agriculture, The answer is found on a fair reading of the

’. Agricultural Marketing Agreement Act in-the context of

' its purposes and of the scheme fesigned by Congress for

their realization. {

The sections of the statutedirectly siavuat to our pirob:

‘ lem are.set out in the margin.’ / Briefly, the district courts

of the United Stale are “? rested with jurisdiction specifi-

1 “Ss (6) The several district courts.of the United States are hereby. _

vested with jurisdiction specifically to enforce, and to prevent and

i¥ my "UNITED STATES v, RUZICKA:

cally toy enforce” - orders issued pursuant. to ‘the Act?

The ActZ authorizes a handler, to challenge before the®

_ Secretary of Agriculture his ordét “or any ‘obligation i im- -

ic posed in connettion therewith”, as “not in, accordance with

restrain any person from violating any order, reisletion, or “agree-.

ment, herétofore or hereafter made or issued pursuant to this title,

‘in any p ding now pending or hereafter brought i in said courts.

Se (15) (A) »Any handier subject to an order may file a written peti- . :

ton with the Secretary of Agriculture, stating that’ any sueh order or

ay provision of any such‘ order or any obligaticn imnposed in. connec-

tion therewith is not in accordance with law and praying for a modifi-

cation thereof or to be exempted therefrom. He shall thereupon be

given an opportunity for a hearing upon such petition, in ac¢ordance

with regulations made by the Secretary of Agriculture, with, the

pproval of the President. After such hetring, -the Secretary shall’

make a'rulfag upon the prayer of such petition which shall be final, if.

‘in accordance with law.

8e (15) (B) The District Courts of the United States (including

the District Court of the United States for the District of Columbia)

in any district in which such handler-.is an inhabitant, or has his prin-

_ cipal place of business, are hereby vested with jurisdiction in equity

to review such ruling, provided a bill in equity for that purpose is filed

* within twenty days from the date of the entry. of such ruling. Serv-

ice of process in such proceedings may be had upon the Secretary by ~—

_, deli rad is to him @ copy of, the bili of complaint. If the court deter-

that such ruling is not in accordance: with law, it shall remand

such proceedings to the Secretary with directions either (1) to make |

such ruling aa the court shall determine to be in accordance with

law, or (2) to take such further proceedings as, in its opinion, the

“law requires. The pendency of procecdings instituted pursuant to

. this sub-section (15) ll not impede, hinder, or delay the United

States or the Secretary of Agriculture froni obtaining’ relief pursuant:

.to- section 8a (6) of this title. Any proceedings brought pursuant

.to section Sa (6) of this title (except where brought by way of —

counterclaim in proceedings instituted pursuant to. this subsection’

(15)) shall abate whenever'a final decree has been rendered in pro-

ceedings between the same parties, anil covering the sathe subject’

matter, instituted pursuant’ to this’ subsection (15).”

* Section Sa, (S) is also invoked by petitioner. But that section adds

. to the Government’ 8 remedies. It impliés no judicial review in favor

of handlers. ¥

“|. UNETED STATES’. RUZICKA. 8

law”, and to ask to have it modified or to be exempted:

from it, When the order is so challenged, the determina-

K tion of the Secretary of Agriculture, after hearing, is final

\ hut only “if in accordance with law”. Section Se (15) (A).

To test whether such ruling is “in accordance with law” the

handler may bring the Secretary’s action for review before |

the appropriate district court. - Section 8c (15) (B).. But |

the very subsection, (15), which gives the handler access -

“to the Secretary. of Agriculture for administrative relief

‘ and opportunity for judicial review 6f his determination,

provides that tha pendency of the proceedings before the

Secretary, or in the district court to. review the Secretary's

. ruling, “shall not impede, hinder, OF delay. the United

States or the Secretary of Agriculture from obtaining re- .

lief”. under § 8a (6). It is only when “a final decree has

been rendered in proceedings between the. same parties,

and covering the same. subject matter, instituted pursu-

ant to this subsection (15).” that proceedings brought for

enforcement under § 8a (6), “shall abate”. Section. 8c

(15) (B). 3 GALE ig

To be sure, Congress did not say in words that, in a pro-

ceeding under § 8a (6) to enforce an order, a handler may .- .

_ “not question an obligation which flows from it. But mean-

ing, though not explicitly stated in words, may be imbed- ~

~ ded ‘in-a coherent’ scheme. And such we find to be the

provisions taken in their entirety, as a means for attaining

the purposes of the Act while at the same time protecting

adequately the interests of individual handlers.

"aggrieved handler an appropriate opportunity for the cor-

- reetion of errors or-abuses by the agency charged with the

The procedure devised by Congress explicitly gave to an

intricate business of milk control. In addition, if the -

Seottery fails to make.amends called for by law the han-

dle

r may challenge the legality of the Secretary's ruling.

in court. ‘Handlers are thus assured opportunity to estab-

lish claims of grievances while steps for the protection

& @

6 UNITED STATES v. RUZICKA.

of the industry as a whole may go forward, Sections 8a

(6) and 8c (15) thus form a complementary procedural

scheme. Contrariwise, it would make for disharmony to

extrapolate from these provisions of the statute the right

to consider independently, in a proceeding by the Govern-

ment for the enforcement of the Secretary's order, ques-

tions for which Congress explicitly furnished the handJer

an expert_forum for contest with ultimate review by a

district court.

The situation before us indicates how disruptive it

would be to allow issues that may properly come before a

- district court in a proceeding under § 8c (15) to be open for

_ independent adjudication in a suit for enforcement under

.§8a (6). After a presumably careful study by those tech-

nically equipped, a program was devised for the dairy

farmers in one of the large areas of the country. The suc-

cess of the operation of such Congressionally authorized

milk control must depend on. the efficiency of its adminis-

tration. Promptness of compliance by those subject to -

the scheme is the presupposition of Order No. 41. Thus,

definite monthly deadlines are fixed by the Order for every

step in the program. In measure, the success of

this scheme revolves around @ “producers” fund which is

eclvent and to which all confribute in accordance with a

formula equitably deteriningt and of uniform applicabil-.

ity. Failure by handlerstto meet their obligations

promptly-would threaten the whole scheme. Even .tem-

porary defaults by some handlers may work unfairness to

others, encourage wider non-compliance, and engender .

those subtle forces of doubt and distrust which so readily

disincate delicate economic arrangements. To make the

vitality of the whole arrangement depend on the con-

tingencies and inevitable delays of litigation, no matter

how alertly pursued, is not a result to be attributed to

Congress. unless support for it is much more manifest

~than we here find. -That Congress avoided such hazards

UNITED STATES ». RUZICKA. 7

for its policy is persuasively indicated by the procedure

it devised for the careful administrative and judicial con-

sideration of a handler’s grievance. It. thereby. safe-

~guarded individual as well as collective interests. In the

case before us, administrative proceedings were instituted

before the Secretary of Agriculture and, apparently, are

awaiting his action. Presumably the Secretary of Agri-

culture will give the respondents the rights to which Con-

greas said they were entitled. If they are dissatisfied with

his ruling. they may question it in a district court. The

interests of the entire industry need not be disturbed in

order to de justice to an individual case.* .

It is suggested that Congress did not authorize a dis-

trict court to enforce an order not “in accordance with

law”. The short answer {o this rather dialectic point is

that whether such an order is or is not in accordance with

law is not a question that brings its own immediate answer,

or even an answer which it is the familiar, everyday. busi-

ness of courts to find. Congress has provided.a special

procedure for ascertaining whether such an order is or is

not in aecordance with law. The questions are not, or may

not be, abstract. questions of-law. Even when they are

formulated in constitutional terms, they are questions of

law arising out of, or entwined with, factors that call for

understanding of the milk industry. And so Congress has

*“During the period while any such petition is pending before the

Secretary and until notice of the Secretary's ruling is given to the .

petitioner, the penalties imposed by the att for violation of an order

cannot be imposed upon the petitioner if the court finds that the .

petition was filed in good faith and not for delay. The Secretary.

may, nevertheless, during this period proceed to obtain an injunction

against the petitioner pursuant to section 8a (6) of the Agricultural

Adjustment Act... . It is believed that these provisions establish

an equitable and expeditious procedure for testing the validity of

ordere without hampering the Government’s power to enforce com-

p. 14.

Sacaheacee UNITED STATES v. RUZICKA.

seovided that the- remedy in the first instance must be.

sought from the Secretary of Agriculture. It is on the

basis of his ruling, and of the elucidation which he would

presumably give to his ruling, that resort may, be had to

the courts. Congress seems to have emphasized the differ-

ent functions in the enforcement of the Act that § 8a and

§ 8c serve by explicitly directing that the proceedings for |

relief instituted by a handler under § 8c shall not “impede,

_ hinder, or delay” enfércement proceedings by the United

States under § 8a.

We are dealing here solely with the rights of handlers...

. .. This is not Stark v, Wickard, 321 U.S. 288. In that case

it was concluded that since Congress had provided no ad-

‘ ministrative remedy for a producer to review the legality

of an order against him, presumably the courts were

not closed to him. But by § 8c (15) Congress has made

precisely such provisions for handlers. As to them the .

procedural scheme is complete. .

The Agricultural Marketing Agreement Act is one. of

many enactments by which Congress in regulating eco-:

nomic enterprise has divided the duty of enforcement be-

tween courts and administrative agencies. But there i is the’

_ greatest variety in the manner in which Congress has dis-

tributed this responsibility. Those who are entitled to

speak tell us that *’ . development of the natural sciences _

has often suffercu from premature generalization. Cer-

tainly the recent growth of administrative law counsels

against generalizations regarding what is compendiously

called judicial review of administrative action. And so

we deem it desirable, in a case like this, to hug the

shore of the precise problem before us in relation to the

provisions of the particular Act immediately relevant.

. One general observation, may, however, be permitted.

Both courts and administrative bodies are law-enforcing

agencies, utilized by Congress as such. In construing the

enforcement provisions of legislation like the Marketing

UNITED STATES °. RU ZICKA. 9

Act, it. is important to remember that courts sad adminis-

trative agencies are collaborative “instrumentalities of

justice”, and not business rivals. See United States v.

Morgan, 307 J). S. 183, 191; Federal Communications

Commission v. Pottsville Broadcasting —'o., 309 U.S. 134,

- 144 et seq. Aid so we are net called upon to decide what

powers inhere in a court ef equity, exercising due judicial

~ \ diseretion, even in a suit such as was here brought by the

United States for the enforcement of an order under § 8a.

We say this because it appears.that at a stage in the pro-

ceedings in the district court a motion for a stay, pending

disposition of the petition by the Ruzickas before the Sec-

retary of Agriculture; was made by the respondents.

With the court's leave, this motion was subsequently

_ withdrawn. The power of the district court to have acted

on it is therefore not before’ us. Compare Scripps How-

321 U. 8. 321. at

Judgment Reversed.

Mk. Justice DovGLas concurs in the result.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.