Writ of Certiorari Granted October 18, 1943. See 64 S.Ct. 81, 88 L.Ed. ___.
EDGERTON, Associate Justice.
This is a suit for an injunction, brought by the Price Administrator against the Hecht Company under Section 205(a) of the Emergency Price Control Act of 1942.
Section 205(a) provides: "Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond." [Italics supplied.] The pertinent language of section 4, 50 U.S.C.A.Appendix, § 904, is: "(a) It shall be unlawful * * * for any person to sell or deliver any commodity * * * or otherwise to do or omit to do any act, in violation of any regulation or order under section 2, or of any price schedule effective in accordance with the provisions of section 206, or of any regulation, order, or requirement under section 202(b) or section 205(f), or to offer, solicit, attempt, or agree to do any of the foregoing."
The complaint charges the Company with several sorts of violations of the General Maximum Price Regulation which was issued under the authority of the Act on April 28, 1942.
In its findings of fact or in an accompanying opinion the District Court said among other things: "The defendant and its employees have attempted, in good faith, to comply with the act, and have taken vigorous steps to do so. The compliance thus resulting has been very substantial. * * * Violations occurred but I do not consider them numerous in view of the difficulties involved in defendant's efforts to comply with the act and regulation. * * * The defendant took timely, positive and vigorous measures to understand the requirements and to meet them. It set up a capable organization with an unlimited expense account, charged with the duty of directing and supervising the personnel in an honest and sincere effort to comply in full measure with the requirements of the act and regulation. * * * I do not find that the defendant company is chargeable with bad faith or * * * disloyal motive or purpose. It is not charged that the defendant was wilful in its violations and I think it appropriate to say that the element of wilfulness is entirely lacking in the evidence. * * * Some of the violations may have resulted from negligence or carelessness but I find them innocent in character. No inference of intentional wrong doing may be drawn from them. It may be said to the credit of the defendant company that all errors and mistakes were promptly corrected as soon as they were discovered. It should also be added that the defendant has consistently improved its methods and its records to more fully meet the requirements of the act and regulation and to combat the difficulties which arise from the elements of human frailty. * * * These mistakes in pricing and listing were all made in good faith and without intent to violate the regulations. The performance of the store as to posting was excellent. * * * There is manifestation of
The court also found that "an injunction would have no effect by way of insuring better compliance in the future and would be unjust to the defendant. An injunction would not be in the public interest." These findings regarding the effect of an injunction are immaterial, in the view we take of the law, and we need not consider whether the evidence supports them. The court's other findings are supported by substantial evidence and we therefore accept them as correct. We do not understand either party to question any of these other findings which we understand the court to make. The Administrator concedes that the Company's violations were not wilful. It is clear that the Company made serious and costly efforts to comply with the law.
But it is also clear that in many hundreds of instances the Company failed to comply with the law. This suit was based upon a "spot check" which the Administrator made in a few departments of the Company's store. The Company does not question the correctness of the Administrator's statement that "the evidence showed without dispute that in a space of only five months in but seven of the 100 or more departments defendant in direct violation of the * * * Regulation, (1) made 3,838 sales at prices in excess of the legal maximum; (2) collected at least $4,623.15 more than it was legally entitled to do; (3) failed to include on the Cost-of-Living Statement which it was required to file with the appropriate War Price and Ration Board more than 460 articles which should have been included thereon; and (4) failed to describe with sufficient clarity more than 410 items scheduled on the Cost-of-Living Statement which it did file. * * * Wherever investigation was made violations were found."
Within the meaning of § 205(a) the Company "has engaged * * * in * * * acts or practices which constitute * * * a violation of * * * section 4." Many statutes are interpreted to mean that one who actually does what the statutes prohibit is guilty of violating them notwithstanding his good faith. "Many instances of this are to be found in regulatory measures in the exercise of what is called the police power where the emphasis of the statute is evidently upon achievement of some social betterment rather than * * * punishment * * *".
Our case is a clearer one for the application of the principle that good faith is no defense, since § 205(a) imposes no criminal penalties. Its purpose is not in any degree to punish the defendant, but solely to protect the public. It is a police regulation of great scope and importance. Innocent non-conformity with the Price Control Act is as inflationary and as damaging to competitors and the public as guilty non-conformity. The intention of Congress in § 205(a) to cover well-intentioned as well as ill-intentioned conduct is emphasized by the contrast between the language which Congress used in this subsection and in the one which immediately follows it. § 205(b), which imposes criminal penalties, deals with "any person who willfully violates any provision of section 4," while § 205(a), which provides for injunctions, deals with "any acts or practices which constitute or will constitute a violation of any provision of section 4."
The question remains whether the Act merely authorized the court to grant an order without regard to equitable considerations, such as the Company's good intentions and the probable effect of granting an order, or whether it required the court to do so. Unless it required the court to do so, Congress turned over to the court the important question whether the granting of an order against a violator of the Act should be a matter of course or should depend upon the general principles of equity. But Congress was free to decide that question and there was no apparent reason for leaving it to the court. We think Congress did not leave it to the court. The phrase "a permanent or temporary injunction, restraining order, or other order shall be granted", in its context, means in our opinion that an injunction or other order is to be granted as of course when violations of the Act are found. Only the affirmative or negative character of the order, and its other details, are left to the court's discretion.
To most laymen, the question whether the word "shall" in a statute is mandatory would doubtless seem to answer itself. The legal proposition that the word is not necessarily mandatory and may be "merely directory" is a more or less technical one. Sometimes this proposition means only that violation of a statutory mandate may entail no consequences when the statute prescribes none; as when waivers of notice are allowed to validate a corporate meeting held without notice although a statute provides that notice shall be given.
Since no two statutory uses of the word are identical in context, purpose, and legislative history, argument from one statute to another is not conclusive. But there is enough resemblance between the direction of Congress to the Board in the National Labor Relations Act
Neither the context nor the legislative history of the Emergency Price Control Act suggests any unusual meaning of the word "shall." On the contrary, both confirm its common meaning. It is recognized that the use of "may" and "shall" in one sentence implies that each word is used in its own ordinary sense and not in the ordinary sense of the other.
When H. R. 5479, for which the present Act was substituted, was in the House of Representatives, Section 205(a) read: "* * * upon a proper showing a permanent or temporary injunction, restraining order, or other order shall be granted without bond." Accordingly the House Committee on Banking and Currency said in its report: "Upon a proper showing a temporary or permanent injunction, restraining order, or other order is to be granted without bond."
When Congress passed the Emergency Price Control Act it realized that there was an emergency. It knew that the war was producing and would produce prodigious increases in public expenditures and private purchasing power together with a dearth of many things for which buyers compete. It knew that unless effective price control was achieved, these conditions would force up prices and then wages to meet prices and then prices to meet wages, until and even after inflation became fantastic. It realized that, as the Senate Committee said, "of all the consequences of war, except human slaughter, inflation is the most destructive. * * * Rising prices and increases in the cost of living bring misery to our people, cause industrial unrest, and undermine our unity. * * * Living costs tend to rise more quickly than wages, [and] the burdens of war are haphazardly distributed, with the heaviest burden on the farmer, the salaried worker, the small investor, the pensioner, and the veteran, whose incomes cannot readily be expanded. Rising living costs mean labor disputes and spiraling wage demands. And the suspicion of profiteering causes discontent which hampers production as surely as the bombing of factories. Rising prices now foreshadow * * * deflation later with attendant depression and suffering. Such prospects and fears * * * sap energy and morale now. Rising prices limit production. For price uncertainties prevent future planning and long-term commitments which are an integral part of the industrial process. * * * Rising prices inevitably increase the cost of the defense program."
Inflation is infectious and cumulative. It
EICHER, Chief Justice of District Court.
I concur fully in Judge EDGERTON'S opinion, but upon reading Chief Justice GRONER'S dissenting opinion I deem it appropriate to add several supplemental observations. It is difficult for me to view an injunction which merely forbids violation of the law as a punishment. Further violations are not only threatened in this case, but are claimed to be unavoidable. If, after injunction, they do occur, and contempt proceedings follow, then for the first time do quasi-criminal sanctions come into play and penalties may be imposed. Before doing so, courts can and will give full weight to a showing that violations have been inadvertent and innocent and not wilful, for in such an inquiry the courts are no longer under statutory mandate, but are exercising their inherent powers.
This leads me to observe that the Emergency Price Control Act is sui generis in one important respect. It has set up an Emergency Court of Appeals upon which Congress has conferred exclusive jurisdiction to try all questions affecting the validity of the Act and of regulations promulgated thereunder. If specific regulations cannot be complied with, the place to test them is not in this proceeding but in the forum that Congress has provided, or in Congress itself which gave those regulations the force and effect of law.
Also I would respectfully comment upon the dissenting opinion's quotation from the Report of the Senate Committee by pointing out that it refers to "orders to enforce compliance." In a case where non-compliance is conceded, how can any discretion be gleaned from those words?
And, further, it occurs to me that the same thought pervades the words "or other order" in the statute, which are followed by the words "shall be granted without bond." It is true they imply discretion to grant some other order than an injunction, but I cannot believe they imply discretion to grant no order at all, the statutory showing of violation being present. To the contrary, the words "without bond" inexorably imply an order that otherwise would require bond, namely, an order for some sort of affirmative relief.
Finally, I believe that failure to cooperate with the Administrator where the statutory facts appear, would encourage resumption of violations and would amount to judicial modification of clearly announced Congressional policy.
Judge EDGERTON concurs in this opinion.
GRONER, C. J. (dissenting).
I think it not improper to state briefly the reason I am unable to concur in the Court's opinion. The record shows that after extensive hearings the District Court made findings to the effect that though violations of the Price Control Act had been shown, they were, in the circumstances, neither numerous nor wilful and that defendant at all times after the passage of the Act attempted in good faith to comply with its provisions and took vigorous steps to do so, and that in those instances in which errors of overcharge were made the mistakes were corrected as soon as discovered. I mention these findings merely as background. I am far from thinking that, alone, they are enough. The significant thing to me is that the Court also made findings that prompt and proper steps had been taken by defendant to improve its control system so
As the opinion very well points out, the use by Congress of the word "may" in the forepart of the section, authorizing the Administrator to apply for an injunction, followed by the word "shall" in providing the action to be taken by the court, may, if taken literally, be said to indicate a compulsory purpose and as excluding the idea of discretion in the court to decide whether in a particular case the relief asked is necessary or proper, and that is what the opinion holds. Then, too, this view may be said to be strengthened when it is considered that the bill as it passed the House contained the provision authorizing an injunction "upon a proper showing," whereas these words were later stricken in conference and omitted in the bill as finally passed. But, notwithstanding all of this, I am by no means convinced either that the word "shall" of itself, or that the conference change to which I have referred, should be given the significance of exclusion of the idea of judicial discretion. I think it is more reasonable and proper and more consonant with authority to consider both as subject to the necessary limitation that an equitable case has been made for the exercise of the power. More than appears, I think, is necessary to justify the assumption that Congress intended to coerce judicial action and to destroy judicial discretion and hence to require an injunction to issue, even where the court finds, as it did here, that the facts are such that to do so would accomplish no other result than is already accomplished by the voluntary action of the defendant.
In saying this I am not unmindful that the statutory use of "shall" ordinarily carries a mandatory connotation. But while this is true, it is also true that one of the outstanding and recognized exceptions is that in cases where the legislative direction is addressed to a court or to a judge with relation to a proceeding in its nature equitable, peremptory phrasing which would operate to preclude the exercise of traditional judicial discretion is not and ought not to be given a literal interpretation, unless
Some cases create a superficial, contrary impression. These are distinguishable, however, as cases in which the terms of the applicable statute are not addressed to the court, or the type of proceeding is not in its nature equitable. See for example Mack v. State, 203 Ind. 355, 180 N.E. 279, 83 A.L.R. 1349, which involved the mandatory death penalty statute; Lynn v. Lynn, 256 Pa. 563, 100 A. 975, involving an action of replevin; State v. Mavrikas, 148 Wn. 651, 269 P. 805, statutory confiscation of equipment used in illegal fishing. But with exceptions of this character the rule stated above is generally applied; and this rule obtains even as to statutes in which in addition to the direction that the court "shall", the word "may" is also elsewhere used. State v. Braun, 62 Idaho 258, 110 P.2d 835.
Nor do I find anything in the Act, taken as a whole, which indicates a purpose to make the injunction provision mandatory in every case. Specific punishments are otherwise provided for in other sections for wilful violations of the Act. And it is not going too far to assume that these cover the punishment field. To adopt the majority view would add, as the District Court found, an additional punishment for an inadvertent and innocent violation. And this, contrary to the well established rule that the writ of injunction is used only to stop existing or threatened violations and not to punish past offences. Swift & Co. v. United States, 276 U.S. 311, 326, 48 S.Ct. 311, 72 L.Ed. 587; Walling v. Shenandoah-Dives M. Co., 10 Cir., 134 F.2d 395. Considered in this view, I think the language of the section should be taken only as a grant of authority to act in accordance with well established and well understood equitable procedure; and my view, to some extent at least, is fortified by the Report of the Senate Committee on the section in question, where it is said: "Such courts are given jurisdiction to issue whatever order to enforce compliance is proper in the circumstances of each particular case." And this view of the Committee is grounded on the language used in Section 205, where it is said that upon a showing by the Administrator that the person proceeded against has engaged in the unlawful practice denounced, the court shall grant a permanent or temporary injunction, restraining order, "or other order," — additional words, which to me imply discretion rather than coercion, and which otherwise are useless and redundant.
And I find neither in the opinion nor in the Administrator's brief any authority convincingly to the contrary. The Supreme Court case of National Labor Relations Board v. Pennsylvania Greyhound Line, 303 U.S. 261, 265, 58 S.Ct. 571, 574, 82 L.Ed. 831, 115 A.L.R. 307, relied upon in the opinion, I think more persuasive of the view I have stated than the view for which it is cited. There the language of Chief Justice Stone that "notwithstanding the mandatory form of section 10(c), its provisions in substance leave to the Board some scope for the exercise of judgment and discretion in determining, upon the basis of the findings, whether the case is one requiring an affirmative order, and in choosing the particular affirmative relief to be ordered", indicates to me that there may properly be found in the present Act, as applied to the facts of this case, compelling reasons for "some scope" in the exercise of judicial discretion.
Without more, therefore, I am of opinion that the District Court had authority, upon the finding that the practices complained of were innocently done and would not be repeated, to exercise discretion to refuse injunctive relief. But I am also of opinion that the District Court should not have dismissed the complaint, but should have entered an order retaining it on the docket, with the right to the Administrator, on reasonable notice and a showing that violations of the Act had been resumed, to again apply to the court for injunctive relief.
The Federal Trade Commission Act provides also that when the Commission finds a prohibited act or practice the Commission "shall issue * * * an order * * * to cease and desist from * * * such act or practice." 15 U.S.C.A. § 45(b). Some Circuit Courts of Appeals have thought that the Commission not only need not, but may not, issue an order to "cease and desist" from practices which have been abandoned and are not likely to be repeated. John C. Winston Co. v. Federal Trade Commission, 3 Cir., 1925, 3 F.2d 961; Federal Trade Commission v. Civil Service Training Bureau, 6 Cir., 79 F.2d 113. But cf. note 6, supra. The words "cease and desist," which may seem to imply present continuance or probable repetition, are not present in § 205(a) of the Price Control Act; and the company concedes that its violations of the Act have not ceased.
"Whoever thinks a faultless piece to see, Thinks what ne'er was, nor is, nor e'er shall be."