Allen v. Grand Central Aircraft Co.
347 U.S. 535, 98 L. Ed. 2d 933, 1954 U.S. LEXIS 2606 (1954)
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Rule of Law:
When Congress reenacts statutory language from a prior act, it is presumed to have adopted the long-standing administrative interpretations and enforcement practices associated with that language. Furthermore, a general savings statute allows for the administrative enforcement of violations of a temporary statute to continue even after the statute has expired, unless the temporary statute expressly provides otherwise.
Facts:
- Grand Central Aircraft Company was a California corporation engaged in the production and repair of aircraft equipment in 1951.
- During the Korean War, the Defense Production Act of 1950 authorized the President to stabilize the economy, leading to an order freezing wages at January 25, 1951 levels.
- Between January 26, 1951, and January 1, 1952, Grand Central Aircraft Company paid approximately $5,500,000 in wages to its employees.
- The government alleged that approximately $750,000 of the total wages paid by the company were in excess of the federally mandated wage ceilings established under the Act.
Procedural Posture:
- The Wage Stabilization Board filed a complaint with the National Enforcement Commission, alleging that Grand Central Aircraft Company paid wages in violation of a wage freeze order.
- The National Enforcement Commission appointed an Enforcement Commissioner to conduct an administrative hearing on the allegations.
- Before the hearing occurred, Grand Central Aircraft Company filed suit in the U.S. District Court for the Northern District of California, seeking to enjoin the administrative proceeding.
- A three-judge District Court granted a permanent injunction, preventing the government from continuing with the administrative hearing.
- The government officials (appellants) appealed the District Court's decision directly to the Supreme Court of the United States.
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Issue:
Does the Defense Production Act of 1950 authorize the President, through delegated administrative agencies, to conduct hearings to determine violations of wage stabilization orders and to certify the disallowance of illegally paid wages as business expenses for tax and other governmental purposes?
Opinions:
Majority - Mr. Justice Burton
Yes. The Defense Production Act of 1950 authorizes the President to establish an administrative process to enforce its wage stabilization provisions. The Act's language in § 405(b) was modeled almost verbatim on the Stabilization Act of 1942, under which administrative enforcement proceedings were common and well-known to Congress. By reenacting this language, Congress implicitly approved the established administrative practice of holding hearings and certifying the disallowance of illegally paid wages. The general enforcement provision for judicial action in § 706 does not negate the specific grant of administrative authority in § 405(b). Finally, under the general savings statute, the government's authority to enforce violations that occurred while the Act was in effect is not extinguished by the Act's subsequent expiration.
Analysis:
This case affirms the doctrine of legislative reenactment, establishing that when Congress uses language from a prior statute, it is presumed to adopt the existing administrative and judicial interpretations of that language. The decision reinforces the power of administrative agencies to conduct enforcement proceedings where specifically authorized, even when a statute also contains general provisions for judicial enforcement. It also limits the ability of parties to obtain injunctions against agency proceedings based on claims of potential financial harm, thereby strengthening the principle that administrative remedies must be exhausted before seeking relief in court.
