The opinion of the court was delivered by: MURPHY
Plaintiff (RFC) as transferee
of Defense Supplies Corporation (DSC) seeks from defendant distiller, a Pennsylvania corporation, simple damages for breach of contract; treble damages for violation of maximum price regulations an refund orders, reasonable attorney's fees, interest and costs, by virtue of a violation of Sec. 205(e) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 925(e).
Upon denial of its motion to dismiss plaintiff's complaint
defendant filed an answer and counterclaim. Plaintiff moves for summary judgment on the complaint, to dismiss the counterclaim or alternatively for summary judgment thereon.
The record consists of the complaint and accompanying exhibits, including the contract, defendant's answer and counterclaim, plaintiff's supporting affidavits and defendant's counter affidavit.
Affidavits may be considered on motions for summary judgment to ascertain whether an issue of fact is presented but not as a basis for deciding a fact issue. Frederick Hart & Co., Inc., v. Recordgraph Corp., 3 Cir., 1948, 169 F.1d 580. It is well settled that summary judgment may be entered for either party if the pleadings and affidavits show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Toebelman v. Missouri-Kansas Pipe Line Co., 3 Cir., 1942, 130 F.2d 1016 at page 1018, Love v. United States Rubber Co., D.C.M.D.Pa., 92 F. Supp. 174 at pages 176, 177.
Is there a genuine issue as to any material fact? Is plaintiff entitled to judgment as a matter of law?
The controversy revolves around a dispute between the parties as to (a) the maximum price to be paid by DSC to defendant for alcohol sold and delivered under a written contract; (b) was defendant's refusal to make refunds as directed in OPA price orders wilful or the result of failure to take practicable precautions against occurrence of the violations?
As to certain quarterly periods,
the OPA thereafter fixed maximum prices for defendant's alcohol at a figure lower than that paid to the defendant, and ordered defendant to refund the excess within fifteen days. In each instance defendant refused to comply.
MPR No. 28
Provided that prices were to be based upon defendant's costs, plus a four cent per gallon profit. Although it followed the prescribed formula, the OPA challenged and disallowed certain items of cost as furnished by the defendant. In each price order, when this occurred, defendant was notified as to the items disallowed and of its right to file a protest. The defendant did not file such protest or invoke the methods provided by law to seek revision upward, i.e., pursue the statutory administrative procedure of appeal with the right of judicial review by the Emergency Court of Appeals within the time allotted.
No question can be here raised as to the validity of the relevant regulations and the refund orders on the ground of retroactivity or otherwise. Those are matters exclusively within the jurisdiction of the Emergency Court of Appeals. 50 U.S.C.A.Appendix, § 923, 924; Woods v. Stone, 333 U.S. 472 at pages 474 and 482, 68 S. Ct. 624, 92 L. Ed. 815; Lockerty v. Phillips, 319 U.S. 182 at pages 185, 188, 63 S. Ct. 1019, 87 L. Ed. 1339; Woods v. Hills, 334 U.S. 210, 68 S. Ct. 992, 92 L. Ed. 1322; Yakus v. United States, 21 U.S. 414 at pages 431, 434, 435, 64 S. Ct. 660, 88 L. Ed. 834; Bowles v. Willingham, 321 U.S. 503 at page 512, et seq., 64 S. Ct. 641, 88 L. Ed. 692, and see Porter v. Senderowitz, 3 Cir., 158 F.2d 435 at pages 438, 440, certiorari denied 330 U.S. 848, 67 S. Ct. 1091, 91 L. Ed. 603.
While the Act denies a defendant in an enforcement proceeding the right to challenge the validity of the regulation, it does not deny him the right to attack the Act itself on constitutional grounds. Yakus v. United States, 321 U.S. 414, 430, 64 S. Ct. 660, 88 L. Ed. 834. This right may not however be utilized as a means of indirectly attacking the regulations themselves instead of the statute. Case v. Bowles, 327 U.S. 92 at page 98, 66 S. Ct. 438, 90 L. Ed. 552. As to the constitutionality of the Act itself, see cases cited in the previous paragraph and see Bowles v. American Brewery, Inc., 4 Cir., 146 F.2d 842 at page 844; cf. Taylor v. United States, 9 Cir., 142 F.2d 808 at page 817, certiorari denied 323 U.S. 723, 65 S. Ct. 56, 89 L. Ed. 851; Taylor v. Porter, Em. App., 156 F.2d 805 at page 809, certiorari denied 329 U.S. 792, 67 S. Ct. 203, 91 L. Ed. 671; Speten v. Bowles, 8 Cir., 146 F.2d 602, certiorari denied 324 U.S. 877, 65 S. Ct. 1023, 89 L. Ed. 1429; Shyman v. Fleming, 9 Cir., 163 F.2d at page 463.
Refusal to make a refund directly by the OPA constitutes a violation of the contract and of the Act itself. Under Sec. 205(e) defendant is liable for treble damages unless it proves that the violation was 'neither willfull nor the result of failure to take practicable precautions against the occurrence of the violation.' In this regard wilful means intentional, knowing, voluntary or deliberate, as distinguished from accidental, involuntary or unintentional. Haber v. Garthly, D.C., 67 F. Supp. 774 at page 776, affirmed 3 Cir., 165 F.2d 211; Connor v. Wheeler, D.C.W.D. Pa., 77 F. Supp. 875 at page 879.
We find nowhere in defendant's pleadings any attempt to assert a defense which would negative the claim for treble damages under Sec. 205(e). Such a defense must be pleaded and proved by the defendant. See Bowles v. Krodel, 7 Cir., 149 F.2d 398 at pages 399, 400; Bowles v. Glick Bros. Lumber Co., 9 Cir., 146 F.2d 566 at pages 571, 572. We assume that defendant has asserted its strongest position which is its reliance upon its asserted right that the costs stated by it were justified notwithstanding their disallowance by the OPA.
In its price notice sent to DSC January 3, 1944, in connection with the contract in question defendant advised that prices were subject to upward and downward adjustment in accordance with OPA MPR No. 28, Sec. 1412.261(h). See Yakus ...