1. In an enforcement proceeding under § 205(a) of the Emergency
Price Control Act of 1942, a Federal District Court has power to
order restitution of rents collected by a landlord in excess of
maximums established by regulations issued under the Act. Pp.
328 U. S.
398-399.
2. Under the provision of § 205(a) authorizing the District
Court, upon a proper showing, to grant "a permanent or temporary
injunction, restraining order, or other order," an order for the
recovery and restitution of illegal rents may be considered a
proper "other order" either (1) as an equitable adjunct to an
injunction decree, or (2) as an order appropriate and necessary to
enforce compliance with the Act. Pp.
328 U. S.
399-400.
3. The legislative background of § 205(a) supports the
conclusion that the traditional equity powers of a court remain
unimpaired in a proceeding under that section so that an order of
restitution may be made. P.
328 U. S.
400.
4. The provision of § 205(e) authorizing an aggrieved tenant,
and in certain circumstances the Price Administrator, to sue for
damages does not conflict, except as to an award of damages, with
the jurisdiction of equity courts under § 205(a) to issue whatever
"other order" may be necessary to vindicate the public interest, to
compel compliance with the Act, and to prevent and undo
inflationary tendencies. Pp.
328 U. S.
401-402.
5. In considering a restitution order where there are
conflicting claims between tenants and landlord as to the amounts
due, the District Court has inherent power to bring in all
interested parties and settle the controversies or to retain the
case until the matters are otherwise litigated. P.
328 U. S.
403.
151 F.2d 529 reversed.
The Price Administrator brought suit under § 205(a) of the
Emergency Price Control Act of 1942 to enjoin respondent from
violating the Act and to require respondent
Page 328 U. S. 396
to make restitution of rents collected in excess of maximums
established by regulations issued under the Act. The District Court
enjoined respondent from violating the Act, but denied a
restitution order.
60 F. Supp.
513. The Circuit Court of Appeals affirmed. 151 F.2d 529. This
Court granted certiorari. 327 U.S. 773.
Reversed, p.
328 U. S.
403.
MR. JUSTICE MURPHY delivered the opinion of the Court.
In this case, we are concerned with the power of a federal
court, in an enforcement proceeding under § 205(a) of the Emergency
Price Control Act of 1942, [
Footnote 1] to order restitution of rents collected by a
landlord in excess of the permissible maximums.
The Warner Holding Company, the respondent, owns eight apartment
houses in Minneapolis, Minnesota, containing approximately 280
dwelling units. Between November 1, 1942, and June 29, 1943, it
demanded and received rents in excess of those permitted by the
applicable maximum rent regulations issued under the Act. The
Administrator of the Office of Price Administration then brought
this action in the District Court to restrain the respondent from
continuing to exceed the rent ceilings. The complaint was later
amended to seek, in addition, a decree requiring the respondent
"to tender to such persons as are entitled thereto a refund of
all amounts collected
Page 328 U. S. 397
by defendant from tenants as rent for the use and occupancy of
housing accommodations in excess of the maximum rents established
by said Regulation, provided, however, that defendant shall not be
required to make such tender to any person who has commenced an
action against defendant under Section 205(e) of the Emergency
Price Control Act of 1942 alleging the collection by defendant of
rent in excess of the maximum rents established by said
Regulation."
The District Court enjoined respondent from continuing to
collect rents in excess of the legal maximums, but declined to
order restitution.
Bowles v. Warner Holding
Co., 60 F. Supp.
513. The Eighth Circuit Court of Appeals affirmed the judgment.
151 F.2d 529. Both courts held that there was no jurisdiction under
the statute to order restitution. We granted certiorari because the
result was in conflict with that reached by the Sixth Circuit Court
of Appeals in
Bowles v. Skaggs, 151 F.2d 817, and because
of the obvious importance of the issue in the administration and
enforcement of the Emergency Price Control Act.
This proceeding was instituted by the Administrator under §
205(a) of the Act, which 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."
Thus, the Administrator invoked the jurisdiction of the District
Court to enjoin acts and practices made illegal
Page 328 U. S. 398
by the Act and to enforce compliance with the Act. Such a
jurisdiction is an equitable one. Unless otherwise provided by
statute, all the inherent equitable powers of the District Court
are available for the proper and complete exercise of that
jurisdiction. And since the public interest is involved in a
proceeding of this nature, those equitable powers assume an even
broader and more flexible character than when only a private
controversy is at stake.
Virginian Ry. Co. v. System
Federation, 300 U. S. 515,
300 U. S. 552.
Power is thereby resident in the District Court, in exercising this
jurisdiction, "to do equity and to mould each decree to the
necessities of the particular case."
Hecht Co. v. Bowles,
321 U. S. 321,
321 U. S. 329.
It may act so as to adjust and reconcile competing claims and so as
to accord full justice to all the real parties in interest; if
necessary, persons not originally connected with the litigation may
be brought before the court so that their rights in the subject
matter may be determined and enforced. In addition, the court may
go beyond the matters immediately underlying its equitable
jurisdiction and decide whatever other issues and give whatever
other relief may be necessary under the circumstances. Only in that
way can equity do complete, rather than truncated, justice.
Camp v. Boyd, 229 U. S. 530,
229 U. S.
551-552.
Moreover, the comprehensiveness of this equitable jurisdiction
is not to be denied or limited in the absence of a clear and valid
legislative command. Unless a statute in so many words, or by a
necessary and inescapable inference, restricts the court's
jurisdiction in equity, the full scope of that jurisdiction is to
be recognized and applied. "The great principles of equity,
securing complete justice, should not be yielded to light
inferences, or doubtful construction."
Brown v.
Swann, 10 Pet. 497,
35 U. S. 503.
See also Hecht Co. v. Bowles, supra, 321 U. S.
330.
It is readily apparent from the foregoing that a decree
compelling one to disgorge profits, rents or property acquired
Page 328 U. S. 399
in violation of the Emergency Price Control Act may properly be
entered by a District Court once its equity jurisdiction has been
invoked under § 205(a). Indeed, the language of § 205(a) admits of
no other conclusion. It expressly envisages applications by the
Administrator for orders enjoining violations of the Act and for
orders enforcing compliance with the Act, and it expressly
authorizes the District Court, upon a proper showing, to grant "a
permanent or temporary injunction, restraining order, or other
order." As recognized in
Hecht Co. v. Bowles, supra,
321 U. S. 328,
the term "other order" contemplates a remedy other than that of an
injunction or restraining order, a remedy entered in the exercise
of the District Court's equitable discretion. An order for the
recovery and restitution of illegal rents may be considered a
proper "other order" on either of two theories:
(1) It may be considered as an equitable adjunct to an
injunction decree. Nothing is more clearly a part of the subject
matter of a suit for an injunction than the recovery of that which
has been illegally acquired and which has given rise to the
necessity for injunctive relief. To be sure, such a recovery could
not be obtained through an independent suit in equity if an
adequate legal remedy were available. [
Footnote 2]
White v. Sparkill Realty Corp.,
280 U. S. 500;
Lacassagne v. Chapuis, 144 U. S. 119. But
where, as here, the equitable jurisdiction of the court has
properly been invoked for injunctive purposes, the court has the
power to decide all relevant matters in dispute and to award
complete relief even though the decree includes that which might be
conferred by a court of law.
Alexander v. Hillman,
296 U. S. 222,
296 U. S.
241-242.
Page 328 U. S. 400
(2) It may be considered as an order appropriate and necessary
to enforce compliance with the Act. Section 205(a) anticipates
orders of that character, although it makes no attempt to catalogue
the infinite forms and variations which such orders might take. The
problem of formulating these orders has been left to the judicial
process of adapting appropriate equitable remedies to specific
situations.
Cf. Phelps Dodge Corp. v. Labor Board,
313 U. S. 177,
313 U. S. 194.
In framing such remedies under § 205(a), courts must act primarily
to effectuate the policy of the Emergency Price Control Act and to
protect the public interest while giving necessary respect to the
private interests involved. The inherent equitable jurisdiction
which is thus called into play clearly authorizes a court, in its
discretion, to decree restitution of excessive charges in order to
give effect to the policy of Congress.
Clark v.
Smith, 13 Pet. 195,
38 U. S. 203.
And it is not unreasonable for a court to conclude that such a
restitution order is appropriate and necessary to enforce
compliance with the Act and to give effect to its purposes. Future
compliance may be more definitely assured if one is compelled to
restore one's illegal gains, and the statutory policy of preventing
inflation is plainly advanced if prices or rents which have been
collected in the past are reduced to their legal maximums.
The legislative background of § 205(a) confirms our conclusion
that the traditional equity powers of a court remain unimpaired in
a proceeding under that section so that an order of restitution may
be made. The Senate Committee on Banking and Currency, in reporting
upon the bill which became the Emergency Price Control Act, stated
in regard to § 205(a):
"In common with substantially all regulatory statutes, the bill
authorizes the official charged with the duty of administering the
act to apply to any appropriate court, State or Federal, for an
order
Page 328 U. S. 401
enjoining any person who has engaged or is about to engage in
any acts or practices which constitute or will constitute a
violation of any provision of the bill. Such courts are given
jurisdiction to issue whatever order to enforce compliance is
proper in the circumstances of each particular case."
S.Rep. No. 931, 77th Cong., 2d Sess., p. 10. [
Footnote 3] The last sentence is an
unmistakable acknowledgement that courts of equity are free to act
under § 205(a) in such a way as to be most responsive to the
statutory policy of preventing inflation.
It is true that § 205(e) authorizes an aggrieved purchaser or
tenant to sue for damages on his own behalf, and if that person has
not sued within the statutory period, or for any reason is not
entitled to sue, the Administrator may institute an action for
damages on behalf of the United States. [
Footnote 4] To the extent that damages might properly
be awarded by a court of equity in the exercise of its jurisdiction
under § 205(a),
See Veazie v.
Williams, 8 How. 134,
49 U. S. 160, §
205(e) supersedes that possibility and provides an exclusive remedy
relative to damages. It establishes the sole means whereby
individuals may assert their private right to damages and whereby
the Administrator, on behalf of the United States, may seek damages
in the nature
Page 328 U. S. 402
of penalties. [
Footnote 5]
Moreover, a court giving relief under § 205(e) acts as a court of
law, rather than as a court of equity. But, with the exception of
damages, § 205(e) in no way conflicts with the jurisdiction of
equity courts under § 205(a) to issue whatever "other orders" may
be necessary to vindicate the public interest, to compel compliance
with the Act, and to prevent and undo inflationary tendencies.
Restitution, which lies within that equitable jurisdiction, is
consistent with and differs greatly from the damages and penalties
which may be awarded under § 205(e).
Bowles v. Skaggs,
supra, 151 F.2d 821. When the Administrator seeks restitution
under § 205(a), he does not request the court to award statutory
damages to the purchaser or tenant or to pay to such person part of
the penalties which go to the United States Treasury in a suit by
the Administrator under § 205(e). Rather, he asks the court to act
in the public interest by restoring the
status quo and
ordering the return of that which rightfully belongs to the
purchaser or tenant. Such action is within the recognized power,
and within the highest tradition, of a court of equity. Thus, it is
plainly unaffected by the provisions of § 205(e).
Page 328 U. S. 403
Nor do we find any other provision of the Act that expressly or
impliedly precludes a court from ordering restitution in the
exercise of its equity jurisdiction under § 205(a). This is not a
situation where a statute has created a right and has provided a
special and exclusive remedy, thereby negativing any jurisdiction
that might otherwise be asserted.
United States v.
Babcock, 250 U. S. 328. And
it clearly is not an instance where equity jurisdiction is lacking
because of a failure to exhaust prescribed administrative remedies.
Myers v. Bethlehem Shipbuilding Corp., 303 U. S.
41. Rather, it is an occasion where Congress has
utilized, save in one aspect, the broad equitable jurisdiction that
inheres in courts, and where the proposed exercise of that
jurisdiction is consistent with the statutory language and policy,
the legislative background, and the public interest.
It follows that the District Court erred in declining, for
jurisdictional reasons, to consider whether a restitution order was
necessary or proper under the circumstances here present. The case
must therefore be remanded to that court so that it may exercise
the discretion that belongs to it. Should the court decide to issue
a restitution order, and should there appear to be conflicting
claims and counterclaims between tenants and landlord as to the
amounts due, the court has inherent power to bring in all the
interested parties and settle the controversies, or to retain the
case until the matters are otherwise litigated.
Mallow v.
Hinde, 12 Wheat.193.
Reversed.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
[
Footnote 1]
56 Stat. 23, 33, 50 U.S.C. App. § 925(a).
[
Footnote 2]
But if a defendant, with notice of a pending injunction
proceeding, completes the acts sought to be enjoined, the court of
equity may restore the
status quo by means of a mandatory
injunction.
Texas & N.O. R. Co. v. Northside Belt R.
Co., 276 U. S. 475;
Porter v. Lee, 328 U. S. 246.
[
Footnote 3]
The same report, at p. 25, also states:
"Section 205(a) authorizes the Administrator to enforce
compliance with the provisions of section 4 of the bill whenever,
in his judgment, 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 by making application to
the appropriate court for an order enjoining such acts or
practices, or for an order enforcing compliance with such
provision. Upon a showing by the Administrator that such person has
engaged or is about to engage in any such acts or practices, a
temporary or permanent injunction, restraining order or other order
is to be granted without bond."
[
Footnote 4]
Section 205(e), as amended by the Stabilization Extension Act of
1944, 58 Stat. 632, 640-641, 50 U.S.C. App. § 925(e).
[
Footnote 5]
Congress has recognized that this provision for damage actions
affords "a remedy at law to persons damaged by having had to pay
unlawfully high prices." S.Rep. No.931, 77th Cong., 2d Sess., p. 9.
It has also been stated that
"This action is the people's remedy against inflation. It was
written into the statute because the Congress recognized the
practical need of this aid to enforcement."
S.Rep. No.922, 78th Cong., 2d Sess., p. 14. The amendment to §
205(e), whereby the Administrator was allowed to sue for damages
under prescribed conditions, was said to "close an important gap in
the present system of enforcement sanctions."
Id. Nowhere,
however, was there any indication that § 205(e) was intended to
whittle down the equitable jurisdiction recognized by § 205(a) so
as to preclude a suit for restitution.
MR. JUSTICE RUTLEDGE, dissenting.
In the Emergency Price Control legislation Congress was as much
concerned with remedies as with substantive
Page 328 U. S. 404
prohibitions. [
Footnote 2/1] It
knew that effectiveness of the latter depended altogether upon the
scheme for enforcement. Accordingly, both in the original Act
[
Footnote 2/2] and in later
amendments, [
Footnote 2/3] it
covered the matter of remedies in the greatest detail and
precision. Those provisions were both jurisdictional and
procedural. The general scheme was to confine as narrowly as the
Constitution allows the rights of regulated persons to challenge
provisions of the Act and regulations, and at the same time to
create broad powers for enforcement, by various civil and criminal
sanctions.
Yakus v. United States, 321 U.
S. 414, dissenting opinion
321 U. S. 463.
Congress did not take chances, in either respect, with inference or
construction. It is not excessive to say that perhaps no other
legislation in our history has equalled the Price Control Acts in
the wealth, detail, precision, and completeness of its
jurisdictional, procedural, and remedial provisions.
Yakus v.
United States, supra.
The scheme of enforcement was highly integrated, with the parts
precisely tooled and minutely geared. Legal, equitable, and
criminal sanctions were included. Injured persons' remedies were
dovetailed with and guarded against overlapping those given the
Administrator. He can sue for damages and penalties, after the
injured party has failed to do so in the time allowed; [
Footnote 2/4] to enjoin violation
Page 328 U. S. 405
or secure an order for compliance, with temporary and permanent
relief; [
Footnote 2/5] cause
institution of criminal proceedings; [
Footnote 2/6] and require licensing of dealers with
power to suspend the license and thus drive out of business.
[
Footnote 2/7] This powerful
battery of weapons does not call for reinforcement with armor not
provided in the Act. It was equal to all tasks of enforcement which
conceivably could arise.
Congress could not have been ignorant of the remedy of
restitution. It knew how to give remedies it wished to confer.
There was no need to add this one. Nor do I think it did so. It did
not give it expressly. I do not think "other order," in the context
of § 205(a), includes it. For to have conferred it would have put
the statutory scheme out of joint.
Page 328 U. S. 406
Section 205(e) gives the overcharged person his remedy, for
damages with penalty, for a limited time. Thereafter, the exclusive
right to sue is the Administrator's, and what he recovers goes into
the Federal Treasury, not to the overcharged person. This includes
the amount of the overcharge, which is sued for here. These
provisions, taken together, are a statute of limitations on the
private right of recovery. Once the time goes by, it is cut off and
the Government's right takes its place, in vindication of the
public interest. [
Footnote 2/8]
Restitution, as here sought, is inconsistent with both rights.
It contemplates return of the unjustly taken enrichment to him from
whom it was taken. It is that right the Administrator now seeks to
assert. But he does so, I think, in the teeth of the statute. What
he recovers is what the Act makes part of a sum it says shall be
paid into the Treasury whenever recovered by the Administrator, or
into the overcharged person's pocket when recovered by him. And
these are mutually exclusive, not alternative, rights of recovery.
If the Administrator pays over to the tenants what he recovers in
this suit, he will be paying them money which the Act says shall go
into the Treasury. [
Footnote 2/9]
Their time for suit has passed, and with it their right
Page 328 U. S. 407
to recover these amounts. Whether or not the Administrator can
sue for these amounts on behalf of the Government, foregoing the
penalties, we are not asked to decide. But we are asked, in effect,
to decide that he can take money the Act says shall go into the
Treasury and
Page 328 U. S. 408
give it to persons whose right to recover it the Act has cut
off.
I think the remedy now sought is inconsistent with the remedies
expressly given by the statute and contrary to the substantive
rights it creates. I think too this is why Congress failed to
provide for restitution, indeed cut off that remedy.
This does not imply any restriction upon the creative resources
of a court of equity. When Congress is silent in formulating
remedies for rights which it has created, courts of equity are free
to use these creative resources. But, where Congress is explicit in
the remedies it affords, and especially where Congress, after it
has given limited remedies, enlarges the scope of such remedies but
particularizes them so far as remedies for overcharges are
afforded, even courts of equity may not grant relief in disregard
of the remedies specifically defined by Congress.
MR. JUSTICE REED and MR. JUSTICE FRANKFURTER join in this
opinion.
[
Footnote 2/1]
See H.Rep. No.1409, 77th Cong., 2d Sess., 12-13; S.Rep.
No.931, 77th Cong., 2d Sess., 8-9, 25-28; H.Rep. No.1658, 77th
Cong., 2d Sess., 26-27.
"Price control which cannot be made effective is at least as bad
as no price control at all. It will not stop inflation, and enables
those who defy regulation to profit at the expense of the buyers
and sellers who unselfishly cooperate in the interests of the
emergency."
S.Rep. No.931,
supra, p. 8.
[
Footnote 2/2]
Section 205, 56 Stat. 23, 33-35.
[
Footnote 2/3]
58 Stat. 632, 640-641, amending subsections (c), (e), and (f) of
§ 205 as it was in the original Act and adding subsection (g).
[
Footnote 2/4]
Section 205(e), 50 U.S.C.Appendix, § 925(e).
See
328
U.S. 395fn2/9|>note 9.
[
Footnote 2/5]
Section 205(a):
"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."
50 U.S.C.Appendix, § 925(a).
[
Footnote 2/6]
Section 205(b):
"Any person who willfully violates any provision of section 4 of
this Act, and any person who makes any statement or entry false in
any material respect in any document or report required to be kept
or filed under section 2 or section 202 shall, upon conviction
thereof, be subject to a fine of not more than $5,000, or to
imprisonment for not more than two years in the case of a violation
of section 4(c) and for not more than one year in all other cases,
or to both such fine and imprisonment. Whenever the Administrator
has reason to believe that any person is liable to punishment under
this subsection, he may certify the facts to the Attorney General,
who may, in his discretion, cause appropriate proceedings to be
brought."
50 U.S.C.Appendix, § 925(b). Section 205(c), 50 U.S.C.Appendix,
§ 925(c).
See Kraus & Bros. v. United States,
327 U. S. 614,
note 4.
[
Footnote 2/7]
Section 205(f), 50 U.S.C.Appendix, § 925(f).
[
Footnote 2/8]
Under § 205(e) in the original Act, 56 Stat. 34, the
Administrator was entitled to bring a suit for damages and
penalties only when the buyer was not entitled to bring such an
action.
See, e.g., Bowles v. Glick Bros. Lumber Co., 146
F.2d 566. The Act was subsequently amended to provide, as set out
in the text, that the Administrator could bring a suit for damages
and penalties also when the injured party had not brought such an
action within thirty days from the date of the occurrence of the
violation. 58 Stat. 640.
See 328
U.S. 395fn2/9|>note 9. The suit at bar was brought before
the passage of the amendment, but that fact is of no significance,
since § 205(e), whether taken in its original or amended form, is
inconsistent with the remedy of restitution sought by the
Government.
[
Footnote 2/9]
Section 205(e):
"If any person selling a commodity violates a regulation, order,
or price schedule prescribing a maximum price or maximum prices,
the person who buys such commodity for use or consumption
other than in the course of trade or business
may, within one
year from the date of the occurrence of the violation, except
as hereinafter provided,
bring an action against the
seller
on account of the overcharge. In such action, the
seller shall be liable for reasonable attorney's fees and costs as
determined by the court, plus whichever of the following sums is
the greater: (1)
such amount not more than three times the
amount of the overcharge or the overcharges, upon which the
action is based as the court in its discretion may determine,
or (2) an amount not less than $25 nor more than $50, as
the court in its discretion may determine:
Provided,
however, That such amount shall be the amount of the
overcharge or overcharges or $25, whichever is greater, if the
defendant proves that the violation of the regulation, order, or
price schedule in question was neither willful [
sic] nor
the result of failure to take practicable precautions against the
occurrence of the violation.
For the purposes of this section,
the payment or receipt of rent for defense area housing
accommodations shall be deemed the buying or selling of a
commodity, as the case may be,
and the word 'overcharge'
shall mean the amount by which the consideration exceeds the
applicable maximum price. If any person selling a commodity
violates a regulation, order, or price schedule prescribing a
maximum price or maximum prices, and
the buyer either fails to
institute an action under this subsection within thirty days
from the date of the occurrence of the violation
or is not
entitled for any reason
to bring the action, the
Administrator may institute such action on behalf of the United
States within such one-year period. If such action is
instituted by the Administrator,
the buyer shall thereafter be
barred from bringing an action for the same violation or
violations. Any action under this subsection by either the buyer or
the Administrator, as the case may be, may be brought in any court
of competent jurisdiction. A judgment in an action for damages
under this subsection shall be a bar to the recovery under this
subsection of any damages in any other action against the same
seller on account of sales made to the same purchaser prior to the
institution of the action in which such judgment was rendered."
50 U.S.C.Appendix, § 925(e). (Emphasis added.)