to inspect and copy them. These requirements are an essential part of the congressional scheme of price stabilization and control. It is hard to see how the purposes of this vital war measure and now during the period of post-economic adjustment could be achieved without them. To effect the end desired, Congress clothed the Administrator with regulatory and investigatory powers commensurate with his responsibilities. He has been armed both with the authority to inspect and with the power of subpoenaing. The regulations on the subject are in harmony with the statutes. The records which the Government requested the right to inspect and copy were of the type required to be kept and to be made available for inspection.
The existence of probable cause for believing that the Act has been violated is not a prerequisite to inspection. It must be remembered that the legislation was passed under emergency conditions grossly affecting the general welfare of the public and the war effort. Upon the Office of Price Administration has been imposed the task of seeing to it that the law is complied with by all dealers in essential commodities, and that evasion be sternly checked. There is a presumption of regularity and respect of the proceedings of administrative bodies. Hence, it is, therefore, presumed that the Administrator has not acted oppressively or undertaken to pursue investigations where no need therefor was apparent. Fleming v. Montgomery Ward & Co., 7 Cir., 114 F.2d 384; United States v. Mulligan, D.C., 268 F. 893; Rodgers v. United States, 6 Cir., 138 F.2d 992, 996; Bowles v. Glick Brothers Lumber Co. et al., 9 Cir., 146 F.2d 566.
It furthermore does not appear that the records involved in the instant proceeding are of such a type, i.e., private books and papers, which were involved in the case of Boyd v. United States, 116 U.S. 616, 6 S. Ct. 524, 29 L. Ed. 746.
The records involved in this proceeding are quasi-public in character and, as to them, the privilege against self-incrimination under the Fourth and Fifth Amendments of the Constitution does not apply. This is true whether the action be regarded as remedial or penal. Bowles v. Beatrice Creamery Co., 10 Cir., 146 F.2d 774; and Bowles v. Glick Brothers Lumber Co., 9 Cir., 146 F.2d 566.
Counsel for the parties involved in this proceeding have been unable to cite to the court any authority which involves the legal proposition involved in this proceeding, i.e., Was the refusal of the defendants to permit the duly authorized investigators of the Office of Price Administration, for and on behalf of the Price Administrator, to inspect and copy the defendants' business records and other documents concerning commodities sold and being sold by the defendants, without the issuance of subpoena duces tecum, a violation of the Emergency Price Control Act of 1942, as amended, so as to justify the court to suspend the license of the defendants?
The court has made a very exhaustive research of the law pertaining to this question, and although no case has been found exactly in point, the authorities hereinafter referred to involve a consideration of the legal proposition which is now before the court for adjudication. In the case of Bowles v. Glick Brothers Lumber Co., reported in 9 Cir., 146 F.2d 566, the court found that the investigation which was made of the defendant's records was with the consent of the defendant and at a time when they were represented by counsel. The court further held that assuming the information was secured by threats, it is hardly credible that these experienced business men, with counsel at their elbow, understood the requests which were made in any other sense than that statutory sanctions would be invoked or legal steps taken to the production of the records if voluntary access to them were refused. The court further held that under the circumstances just mentioned, the defendants were not denied the rights given to them under the Fourth and Fifth Amendments of the Constitution.
In the case of Bowles v. Beatrice Creamery Co., 10 Cir., 146 F.2d 774, the court found that on request to examine the records of the defendant, the consent given was free and voluntary. Although the defendant hesitated in making the records available, said decision was reached after the investigators of the Office of Price Administration submitted their credentials.
It is the contention of the defendants in the instant case that the consent of the owner is necessary for lawful inspection at his place of business, and the defendants are not compelled to make available the records desired without the issuance of a subpoena duces tecum. Cudahy Packing Co. v. Holland, 315 U.S. 357, 62 S. Ct. 651, 86 L. Ed. 895.
It is the further contention of the defendants that such legal process, i.e., a subpoena duces tecum must state the subject of the inquiry, must particularly describe the books and papers so that they can be readily identified, and must limit its requirements to books and papers that are relative to the inquiry. In other words, such process must confine its requirements within the limits which reason imposes in the circumstances of the particular case. Moreover, the person to whom such process is addressed may challenge its legality before being compelled to respond thereto. The statement of law just mentioned appears to have been given great weight and authority in the case of Bowles v. Beatrice Creamery Co., 10 Cir., 146 F.2d 774, 779.
Also in the instant case, there was no application for a license filed by the defendants, unless acceptance may be implied from continuing to do business after the promulgation of Section 1499.16 of General Maximum Price Regulation.
Moreover, section 205(f)(1) provides that the regulation or order may require 'a license as a condition of selling any commodity or commodities with respect to which such regulation, order, or price schedule is applicable.' It would seem, therefore, that the Administrator could not impose additional conditions in the license.
It has been repeatedly held by the courts that authority exists to inspect, copy or investigate any records which are public in nature, or which might be required by law, in order to make possible the legal effectiveness of the act or regulation. Fleming v. Montgomery Ward Co., 7 Cir., 114 F.2d 384 (Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., Wage and Hour Division); McCarry v. Securities and Exchange Commission, 10 Cir., 147 F.2d 389 (Securities Act, 15 U.S.C.A. § 77a et seq.); Oklahoma Press Publishing Co. v. Walling, 10 Cir., 147 F.2d 658 (Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., Wage and Hour Division); Rodgers v. United States, 6 Cir., 138 F.2d 992 (Records required to be kept -- Agricultural Adjustment Act, 7 U.S.C.A. § 601 et seq.); Wilson v. United States, 221 U.S. 361, 31 S. Ct. 538, 55 L. Ed. 771, Ann. Cas. 1912D, 558 (quasi-public documents generally).
In the case of Bowles v. Amato et al., D.C., 60 F.Supp. 361, which was an action for treble damages, the defendants filed a motion to suppress the evidence obtained by the Administrator on the ground that the securing of said testimony violated the defendants' constitutional privilege against self-incrimination. This investigation had been made by virtue of the subordinate powers of the Administrator, and the court held that Congress may require the keeping of records, reasonably necessary, as the means of enforcing valid law and to show whether compliance has been made with the law. Constitutional privilege against self-incrimination is inapplicable as to such records which are quasi-public in character. Records required to be kept by valid statute or by duly authorized regulations, such as the Emergency Price Control Act, and Price Administrator's regulations, are quasi-public and evidence disclosed thereby cannot be suppressed on defendants' motion in an action to recover treble damages so long as defendants are not required to give evidence viva voce or produce their private papers. In this case a subpoena duces tecum was issued against the defendants after the defendants had refused to voluntarily turn over such records, claiming privilege and immunity against self-incrimination.
In the case of Bowles v. Chu Mang Poo, etc., et al. (United Meat Co.), 58 F.Supp. 841, the United States Court in the Northern District of California, Southern Division, decided on February 20, 1945, it was held that persons subject to investigation by the Office of Price Administration may claim all privileges against self-incrimination where the Office of Price Administration does not resort to its subpoena power to compel the production of the records in question.
In the case of Bowles v. Stitzinger et al., D.C., reported in 59 F.Supp. 94, which was an action for treble damages, the defendants voluntarily made available the records of their business to investigators for the Office of Price Administration although no subpoena duces tecum for the production of the documents was produced, and the defendants, therefore, consented to the examination of their records by the Office of Price Administration agents. The court held that the examination which was made, and the evidence which was produced, involved information which was required to be kept by law, which was a quasi-public record, and the constitutional immunities did, therefore, not apply and that the statutes and regulations sanctioning such investigations do not violate the Fourth and Fifth Amendments of our Constitution.
In the case of Bowles v. Kirk, D.C., reported in 59 F.Supp. 97, a similar motion was presented to suppress evidence secured under similar circumstances, i.e., the defendant consented to the inspection of the records and the court held that the admission of said evidence did not violate the Fourth and Fifth Amendments of the Constitution even though no subpoenas were issued therefor.
In the case of Bowles v. Chew, D.C., reported in 53 F.Supp. 787, the defendant permitted the investigators to examine the books and sales records of the company, and the court held there was no search and seizure violating the Fourth and Fifth Amendments of the Constitution since the defendant was required to keep said records.
In the case of Bowles v. Joseph Denunzio Fruit Co., D.C., reported in 55 F.Supp. 9, a representative of the Office of Price Administration told representatives of the company that the purpose of his visit to examine sales records was to establish ceiling prices; the purpose of the subsequent investigation was not stated and the company cooperated in furnishing the information which was subsequently made the basis to establish the violation of Maximum Price Regulations. It was held that the company waived the right to object to the investigation of its records and to make copies thereof.
In the case of Bowles v. Curtiss Candy Co., D.C., reported in 55 F.Supp. 527, investigators for the Office of Price Administration were given the privilege to inspect the records of the defendant for the purpose of acquiring general information. In the course of such inspection or investigation, the inspectors discerned matters which suggested violations of the law and noncompliance with orders and regulations prescribed by the Administrator. The court held this could not be considered an unreasonable search in view of the inquisitorial right conferred by statute and the inspectors did nothing that they would not have a right to do under the law.
In the case of Bowles v. Seitz, D.C., reported in 62 F.Supp. 773, which was an action for treble damages, the defendant was required to testify and produce documentary evidence in accordance with a subpoena duces tecum issued by the Office of Price Administration. The court held that the constitutional privilege against self-incrimination did not apply for the reason that an action for treble damages was not a criminal case within the Fifth Amendment of the Constitution.
It, therefore, appears, after thorough consideration being given the authorities hereinbefore referred to, that whenever the Government validly regulates any business, it has a right to include in its regulation that records shall be kept open to official inspection for the purpose of ascertaining if said individual is complying with the orders or regulations. It appears to me that if an individual offers no objection or voluntarily consents to the examination of his records generally, and it develops that information be secured which would establish that the person has failed or neglected to comply with said orders or regulations, that the evidence secured thereby would not be subject to a motion to suppress. It would furthermore not be a violation of the provisions of the Fourth or Fifth Amendments to the Constitution of the United States, or, in other words, the constitutional rights of the person against self-incrimination would not be violated.
However, if the person governed by any order or regulation of the Office of Price Administration does not voluntarily consent, or refuses to comply with the request to make available the records in connection with his business for the purpose of inspection, that said investigator, under said circumstances, has no right or authority to examine or investigate the records. If any information is secured under the circumstances just mentioned which gives rise to any claim or prosecution, in my opinion, said evidence would be subject to a motion to suppress since it would amount to the person concerned being required to waive his constitutional immunities against self-incrimination. This is true since a subpoena duces tecum was not issued.
If the circumstances just stated arise, the Office of Price Administration has ample authority existing to issue a subpoena duces tecum to compel the person concerned to produce or make available for inspection the records in question. Where the Office of Price Administration fails or neglects to exercise the remedy provided by law, the situation with which it is confronted is due to its failure to exercise the remedy or authority provided by law.
In the instant case, the actions of the defendants in refusing to permit representatives of the Office of Price Administration to inspect said records was a right and privilege guaranteed under the Constitution. However, since the Emergency Price Control Act was an emergency war measure, it was the definite intention of Congress to make said records public in nature. As a result thereof, the privilege of self-incrimination was made subservient to the interest of the public. Also, if a subpoena duces tecum had been duly issued by an authorized representative of the Office of Price Administration, in which the records or information desired pertaining to the business of the defendants was set forth, it would have been the duty of the defendants to comply therewith. This would have been subject only to the right of defendants to establish that the information or records requested would have no connection in any way whatsoever with any commodity or commodities sold by them.
Therefore, the refusal of the defendants to make available the information or records requested was not a violation of the regulations or the Act under the circumstances which exist, and the defendants, as a result thereof, did not violate any provisions of law subsequent to the issuance of the license warning notice.
Therefore, the motion of the defendants to dismiss the complaint is sustained without prejudice, however, to the Office of Price Administration to file such proceedings under the provisions of the Emergency Price Control Act of 1942, as amended, against the defendants for such other relief as might be authorized by law in connection with the violations set forth in the Complaint.
In connection with the motion for a Bill of Particulars, in view of the sustaining of the motion to dismiss, it is unnecessary for the court to consider the propriety of said motion.
An appropriate Order will be filed by the Court with this opinion.
The motion of the defendants to dismiss the complaint is sustained without prejudice, however, to the Office of Price Administration to file such proceedings under the provisions of the Emergency Price Control Act of 1942, as amended, against the defendants for such other relief as might be authorized by law in connection with the violations set forth in the Complaint.
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