The opinion of the court was delivered by: HOLTZOFF
This is an action for an injunction against members of the National Enforcement Commission to restrain them from entering a final decision against the plaintiff, or from issuing a certificate disallowing certain payments of wages said to have been made in violation of the Defense Production Act of 1950. The controversy is before this court on cross-motions for summary judgment.
The plaintiff Slim Olson, Inc., is a concern engaged in the sale of gasoline and gasoline products at Bountiful, Utah. At the time involved in this case, it had about twenty-two employees, mostly station attendants and truck drivers. In 1950 and 1951 it granted wage increases to its laboring men. The plaintiff was then haled before the Economic Stabilization Agency on an accusation of having made these raises in violation of the Defense Production Act of 1950, 50 U.S.C.A.Appendix, § 2061 et seq. The National Enforcement Commission, which is one of the tribunals of the Economic Stabilization Agency, decided that the aggregate wages paid in excess of the amounts permitted by law and regulations, from January 15, 1950 to and including May, 1952, equaled $ 6,509.44. As a penalty the Commission disallowed double that sum, i.e., $ 13,018.88. This decision was made on May 21, 1953. The effect of the penalty, if enforced, is that the last mentioned amount would be disallowed by the Bureau of Internal Revenue in calculating the deductions to which the plaintiff is entitled under the Revenue Laws.
This action to enjoin the enforcement of this decision was then brought. Numerous objections to the validity of the authority and the legality of the decision of the Commission were raised. One of them was that the pertinent provision of the Act is unconstitutional. In the light of the fact that this objection was interposed, a three-judge court was convened. That tribunal reached the conclusion that there was no substantial constitutional question, and accordingly the three-judge court was dissolved and the matter was remitted to an individual judge for determination of the remaining issues.
Before considering these two contentions, it seems helpful to review briefly the pertinent provisions of the statute and the regulations. The Defense Production Act of 1950, Title IV, § 403, Act of September 8, 1950, 64 Stat. 798; 50 U.S.C.A.Appendix, § 2103, authorized the President to impose wage controls. Section 405(b) of the Act, 50 U.S.C.A.Appendix, § 2105, provided that no employer should pay and no employee should receive any wage, salary, or other compensation in contravention of any regulation or order promulgated by the President. It continued as follows:
'The President shall also prescribe the extent to which any wage, salary, or compensation payment made in contravention of any such regulation or order shall be disregarded by the executive departments and other governmental agencies in determining the costs or expenses of any employer for the purposes of any other law or regulation.'
Section 717 of the Act, 50 U.S.C.A.Appendix, § 2166, provided that the Act and all authority conferred thereunder should terminate at the close of June 30, 1952. By a later amendment this date was changed to April 30, 1953, in respect to Title IV of the statute. Section 717 further provided that any agency created under the Act might be continued in existence for purposes of liquidation for not to exceed six months after the termination of the provision authorizing the creation of such agency.
The Act furnished two judicial remedies for its enforcement: a civil suit for an injunction, Section 409(a); 50 U.S.C.A.Appendix, § 2109; and a criminal penalty for any willful violation, appropriate proceedings to that end to be brought under the direction of the Attorney General, Section 409(b), 50 U.S.C.A.Appendix, § 2109(b).
By an Executive over the enforcement of the provisions of the Act relating to salaries and wages, was delegated to the Economic Stabilization Agency, which, in turn, created two instrumentalities for that purpose. One was the Wage Stabilization Board and the other was the National Enforcement Commission, which acted as a reviewing tribunal.
Section 6.1 of the regulations issued under the Act contains the following provision:
'Whenever there has been a final decision in an enforcement proceeding imposing a disallowance sanction, * * * the National Enforcement Commission shall issue a Certificate of Disallowance setting forth * * * the amount which shall be disallowed and disregarded by any Executive Department or other agency or departments or agencies of the Government in determining the costs and expense of the respondent. The certificate of disallowance shall be transmitted by the National Enforcement Commission to the appropriate Executive Departments or other agencies of the Government and a copy served upon the appropriate board or office and the respondent. The certificate of disallowance shall be conclusive for the purposes stated therein.'
'Sec. 4. Disallowance policy -- (a) Purposes of disallowance. The disallowances under the authority granted by sections 2 and 3 may be made ...