Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

JENNINGS v. SHULTZ

March 1, 1973

Paul JENNINGS et al., Plaintiffs,
v.
George P. SHULTZ, Chairman, et al., Defendants


William B. Jones, District Judge.


The opinion of the court was delivered by: JONES

On July 14, 1972, this Court in this action entered an order declaring unlawful defendants' regulation (Cost of Living Council Regulation § 101.104) setting wage rates of $1.90 per hour or less as the level of exemption from wage controls under Section 203(d) of the Economic Stabilization Act of 1970, as amended (Pub.L. 92-210, 85 Stat. 743). The same order enjoined the application of that regulation to the plaintiffs and plaintiff-intervenors, pursuant to Section 211(d)(2) of the Act. Jennings v. Connally, D.C. 347 F. Supp. 409. *fn1"

 The establishment of the so-called "Phase III" by Executive Order 11695, 38 Fed.Reg. 1473 (Jan. 12, 1973), has not mooted the issues before the Court for decision in this case for two reasons. First, the regulations issued under that Order establish wage and price standards that are to be "applied voluntarily and on a self-administered basis." COLC Reg. § 130.11, 38 Fed.Reg. 1480 (Jan. 12, 1973). That voluntary compliance is to be judged by "[The] policies and principles, including the computation methods," which were in effect at the end of "Phase II." COLC Reg. § 130.12, id. Thus the Phase II standards under challenge by the plaintiff and plaintiff-intervenor Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, in this case still govern the administration of the current stage of the economic stabilization program, and this case cannot be considered moot. Second, the plaintiff-intervenor Meat Cutters in this action remains under mandatory wage controls pursuant to COLC Reg. § 130.58, id. at 1483, and thus is still directly affected by the wage standards under challenge. As to that plaintiff-intervenor, this case certainly cannot be deemed moot. Therefore, the Court will now turn to the consideration of the substantive issues in this case.

 Three days after the entry of the July 14, 1972 order, plaintiffs and plaintiff-intervenors filed a motion requesting an order placing a $3.35 hourly wage exemption level in effect until such time as COLC issued a new regulation setting a wage exemption level of at least $3.35 per hour.

 On July 25, 1972, defendants (COLC) filed a motion requesting that the Court's July 14, 1972 order be amended or clarified to declare that that order had prospective effect only and that any new exemption level need not be applied retrospectively to the effective date of the $1.90 exemption.

 Also on July 25, 1972, the Council amended Section 101.104 of its Regulations to provide that after July 14, 1972, the wages of any individual earning less than $2.75 an hour were to be exempt from the application of the controls of the Economic Stabilization Act, as amended, until such a time as the earnings of such individual are no longer less than $2.75 an hour. (37 Fed.Reg. 14998 (July 27, 1972).) On August 8, 1972, the Pay Board created by Executive Order (Section 7, Executive Order No. 11640), published a new regulation implementing the Council's $2.75 per hour exemption (6 C.F.R. § 201.11 (a)(9)). *fn2"

 Following the $2.75 per hour exemption action by the Council and the Pay Board, plaintiffs and plaintiff-intervenor Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO (Meat Cutters) filed with leave of the Court on October 3, 1972, a supplemental complaint. *fn3" The supplemental complaint seeks to have declared the $2.75 per hour exemption unlawful and to have the Council and its delegee Pay Board enjoined from applying wage control regulations to the workers represented by plaintiffs and plaintiff-intervenor Meat Cutters with hourly wages of less than $3.85 until such time as a regulation lawfully implementing Section 203(d) of the Act, as amended, is issued.

 And plaintiffs and plaintiff-intervenor Meat Cutters request that this Court preliminarily enjoin the application of wage controls as to them and the workers represented by them. Plaintiffs and plaintiff-intervenor Meat Cutters (hereafter collectively "plaintiffs") advance a two-fold argument for the equitable relief they seek. First, they assert that COLC in declaring a $2.75 per hour exemption limit on July 25, 1972, was acting arbitrarily and in excess of its statutory authority. Secondly, for this Court to merely declare such exemption limit unlawful would not be sufficient to grant plaintiffs the relief to which they are entitled and that, therefore, this Court's order should exempt, retrospectively as well as prospectively, plaintiffs and the working poor and substandard wage earners they represent from any wage controls until COLC promulgates a valid exemption regulation. As stated by the plaintiffs in their memorandum in support of their motion for a preliminary injunction, that motion involved all of the then pending motions and the supplemental complaint. Since that time, cross-motions for summary judgment have been filed, and the Court will consider all the prior motions as merged for decision into the cross-motions for summary judgment.

 The Cross-Motions for Summary Judgment

 In considering plaintiffs' challenge to the $2.75 per hour exemption limit, this Court, as it had stated in its earlier opinion, "recognizes the serious administrative problems facing COLC in translating the intention of Congress in Section 203(d) [of the Act] into a practicable and equitable standard of exemption from wage controls." 347 F. Supp. at 417.

 According to the affidavit of Dr. Marvin Kosters filed in support of defendants' opposition to the motion for preliminary injunction, COLC, in arriving at the $2.75 per hour exemption limit, used eight computational alternatives with each of those broken down further to take into account different assumptions on the length of the average work week and the average work year. *fn4" Each alternative had as its first computational step the $7,214 Autumn 1971 Bureau of Labor Statistics lower budget applicable to a four-person urban family headed by a wage earner, aged 35-54. *fn5" This was in keeping with the legislative history of Section 203(d) of the Act which makes clear "[That] Congress requires an exemption from wage controls for individuals whose earnings are below budget levels established by the Bureau of Labor Statistics (BLS)." 347 F. Supp. at 414. COLC first adjusted the $7,214 figure by adding $144 for cost of living increases since Autumn 1971 with the result that the adjusted lower budget is $7,358 in the case of each of the eight computational alternatives used by COLC.

 The BLS lower budget was developed to show the total annual income needed to meet the cost of living expenses for an urban family of four headed by a wage earner 35 to 54 years of age. In order to determine primary family *fn6" incomes from collected data, COLC turned to "Household Income in 1970 and Selected Social and Economic Characteristics of Households," Bureau of Census, Current Population Reports, Series P-60, No. 79, July 27, 1971. Table 4 of that publication *fn7" breaks down total household income into dollar amount intervals (including a mean figure for all primary family household families) which are plotted in column and row fashion against income of the head only, once again broken down into dollar amount ranges. The mean income figure from that 1970 table of primary family households which is closest to the Autumn 1971 BLS lower budget of $7,214 is $6,820. The range of income of the head only corresponding to that $6,820 figure is from $4,000 to $4,999. For those cases of less average family income, there was a correspondingly lower income for the head of the family.

 In order to estimate income available to such primary family households, other than that received by the head, COLC took the difference between the average income interval, shown as "Mean Income (Dollars)" in Table 4, and the midpoint of the relevant income range of the head of the household only, shown in Table 4 as "Income of Head." The average of the differences, weighted by the proportional distribution of households falling in each income range of the head only as shown in Table 4, was computed. The resulting average household income, other than through income of the household head, was $2,281. In all eight of COLC's computational alternatives this $2,281 average household income *fn8" figure, representing average income other than that of the household head, was subtracted from the BLS Autumn 1971 lower budget as adjusted for cost of living increases since Autumn 1971.

 In the first computational alternative COLC did nothing more than subtract $2,281 from $7,358, the lower budget adjusted for cost of living increases. The result was $5,077 as the annual income of a family head necessary for the average low-income family to attain the BLS lower budget level of family income. The hourly wage required to produce that annual income would be $2.74, assuming a 37 hour week, 50 week work year. If the head of the family worked a 37 hour, 52 week work year, the hourly wage would be $2.64.

 COLC made three other adjustments to the $5,077 lower budget figure obtained in the first computational alternative. These three adjustments were combined with one another in the seven mathematically possible combinations, each of which formed the basis for one of the seven remaining alternative computations.

 The first of these other adjustments was a downward one of $115 in the $5,077 lower budget figure to reflect a reduction in 1972 of federal income taxes for a family of four in the relevant income intervals.

 The final additional adjustment was a downward one of $280 from the lower budget figure to reflect an average family size of 3.8 persons, instead of the 4 persons assumed in the BLS family. COLC now considers the 3.8 figure as a more appropriate and reasonable estimate of family size than the 3.6 estimate it contended for in July 1972. See 347 F. Supp. at 415-416.

 The annual income of a family head necessary for the average low-income family to attain BLS lower budget level of family income ranged through the application of the eight computational alternatives from a low of $4,682 to a high of $5,184. The hourly wage for a 37 hour week 50 week year ranged from $2.53 to $2.80 and for a 37 hour week 52 week year the range was from $2.43 to $2.69. The hourly wage rate for a 40 hour week 50 week ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.