Lockerty v. Phillips

Supreme Court of the United States · 1943 · Federal Courts

Federal Courtsjurisdiction strippinginferior federal courtsexclusive jurisdictionEmergency Court of Appealsequitable reliefadministrative reviewEmergency Price Control Act

Facts

Appellants were wholesale meat merchants who alleged that Maximum Price Regulation No. 169 set wholesale beef prices so low that they could not obtain meat from packers and resell it within the regulated prices. They claimed the regulation, as applied, would force them out of business and that the Act involved a denial of due process and an unconstitutional delegation of legislative power. They sought to enjoin the United States Attorney from prosecuting them criminally for violations of the Act and the regulation. Although the Act provided an administrative protest procedure followed by review in the Emergency Court of Appeals, appellants did not use that procedure before filing in district court.

Issue

Whether § 204(d) of the Emergency Price Control Act validly withdrew from the district court jurisdiction to enjoin enforcement of the Act and price regulations issued under it. A related question was whether the statutory review scheme adequately preserved judicial consideration of constitutional objections.

Rule

Congress has constitutional authority to define and withhold the jurisdiction of inferior federal courts, including withdrawing equity jurisdiction to restrain enforcement of a federal statute or regulations and vesting exclusive jurisdiction in a specialized court. Where the statute preserves review in that designated court, challenges that a regulation is unconstitutional may be heard there because regulations that involve an unconstitutional application of the statute are "not in accordance with law."

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Congress creates the National Compliance Review Court to hear challenges to federal fuel-allocation regulations. The statute says that court and the Supreme Court on review have exclusive jurisdiction to determine the validity of those regulations, and that no other court may enjoin their enforcement. Nora Benton, a distributor in Cleveland, files in federal district court seeking an injunction against the local United States Attorney, arguing a regulation will destroy her business and violates due process.

How should the district court rule?

Explanation. The majority held that Congress may define and withhold the jurisdiction of inferior federal courts, including withdrawing their equity jurisdiction to restrain enforcement of a federal statute or regulations. When Congress vests exclusive jurisdiction in a specialized federal court and Supreme Court review remains available, the district court lacks power to entertain the injunction suit.