Allen v. Grand Central Aircraft Co.
98 L. Ed. 2d 933, 347 U.S. 535, 1954 U.S. LEXIS 2606 (1954)
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Rule of Law:
The Defense Production Act of 1950, which adopted language from the Stabilization Act of 1942, grants the President authority to establish administrative procedures for enforcing wage stabilization provisions. This enforcement authority for past violations survives the expiration of the Act's substantive provisions under the general federal savings statute.
Facts:
- In 1951, Grand Central Aircraft Company was engaged in the production and repair of aircraft equipment.
- The Defense Production Act of 1950 and a subsequent executive order froze wages at the levels existing on January 25, 1951.
- Between January 26, 1951, and January 1, 1952, Grand Central Aircraft paid approximately $5,500,000 in wages to its employees.
- The Wage Stabilization Board alleged that approximately $750,000 of the total wages paid by Grand Central Aircraft were in excess of the legally permissible wage ceilings established under the Act.
Procedural Posture:
- The Wage Stabilization Board filed a complaint with the National Enforcement Commission (NEC) on November 4, 1952, alleging wage ceiling violations by Grand Central Aircraft.
- The NEC appointed an Enforcement Commissioner to hold a hearing on the allegations, setting a date of February 24, 1953.
- Before the hearing could occur, Grand Central Aircraft filed suit in the U.S. District Court for the Northern District of California against the relevant government officials.
- Grand Central sought an injunction to stop the administrative hearing from taking place.
- A three-judge District Court granted a permanent injunction in favor of Grand Central, blocking the administrative proceeding.
- The government officials (appellants) filed a direct appeal of the District Court's decision to the Supreme Court of the United States.
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Issue:
Does the Defense Production Act of 1950 authorize the President to create an administrative process to enforce wage stabilization provisions by determining violations and prescribing disallowances of excess wages 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 for enforcing wage stabilization. Section 405(b) of the 1950 Act deliberately mirrors the language of the Stabilization Act of 1942, under which an extensive and well-known administrative enforcement system was created and operated. By reenacting this language, Congress is presumed to have adopted the prior administrative construction, a conclusion supported by the legislative history. The general provision in § 706 for judicial enforcement does not negate the specific grant of administrative authority in § 405(b). Furthermore, enforcement for violations that occurred while the Act was in effect may continue after the Act's substantive provisions have expired, pursuant to the federal general savings statute. Finally, the mere possibility of financial harm or embarrassment from an administrative hearing is not a sufficient basis to enjoin a lawfully authorized proceeding.
Analysis:
This decision reaffirms the principle of statutory interpretation that when Congress re-enacts a statutory provision with a well-established administrative interpretation, it is presumed to have adopted that interpretation. The case solidifies the power of the executive branch to use administrative agencies for enforcement, even when a statute also provides for judicial enforcement, by treating specific grants of power as controlling over general ones. The ruling also clarifies that enforcement actions for violations of temporary statutes can continue after the statute's expiration, preventing regulated parties from escaping liability simply by outlasting the law. This reinforces the doctrine of administrative exhaustion by limiting the ability of parties to use courts to preemptively block agency proceedings.
