Rainbow Dyeing & Cleaning Co. v. Bowles

EDGERTON, Associate Justice. This suit was brought by appellee, the Administrator of the Office of Price Administration, against appellant Rainbow Dyeing and Cleaning Co., Inc., to recover three times the amount of certain overcharges. Appellant is in the wholesale dry cleaning business. During March 1942 appellant regularly charged certain customers certain prices and other customers higher prices for the same services. In the ordinary sense of the words, all these customers appear to have been in the same class. The price differences appear to have been [274] due to differences in competitive or bargaining conditions. On July 3, 1943, appellant commenced charging its formerly favored customers higher prices than it had charged them in March 1942. It did not charge them higher prices than it had charged its less favored customers in March 1942. Maximum Price Regulation 165, § 1499.-102, prohibits dealing in consumer services at prices higher than the highest prices which the seller charged during March 1942 to a “purchaser of the same class.” The quotation marks, as well as the quoted words, are used in the Regulation itself. It thereby draws attention to the fact that it does not use the words “purchaser of the same class” in their ordinary sense but in a special sense which it defines. Section 1499.116 supplies the definition: “‘Purchaser of the same class’ refers to the practice adopted by the seller in setting different prices for consumer services for sales to different purchasers or kinds of purchasers * * * or for purchasers located in different areas or for different quantities or grades or under different conditions of sale.”1 It follows from the definition Just quoted that appellant’s price increases violated the Regulation. The definition indicates that a seller’s practice “in setting different prices * * * to different purchasers” puts each purchaser who pays a different price according to this practice in a different "class.”2 Otherwise the term “different purchasers,” in the quoted definition, appears to have no meaning. No one, as far as we know, has suggested any other meaning which it can possibly have. In order to acquit appellant of violating the Regulation it would be necessary to read entirely out of the definition the words “purchasers or,” with the result that the term “different purchasers” would disappear and the definition would refer only to different kinds of purchasers, to purchasers located in different areas, to different quantities or grades, and to different conditions of sale. We see no justification for judicially deleting the words “purchasers or,” or for holding that the words “different purchasers” do not mean what they say. It has been urged in support of appellant’s position that if the words “different purchasers” do mean what they say, they cover all possible ground and the remainder of the definition, which refers to different kinds of purchasers, etc., becomes a mere collection of illustrations or examples of “different purchasers.” Even if this were true it would not be important. A reading which makes certain words illustrations or examples of other words does no such violence to a document as a reading which requires that certain words be eliminated or ignored. It is more in accordance with tradition and sense to construe a document as explaining what it says than as saying what it does not mean. However, the words “different purchasers” do not in fact cover, by any means, all the ground which the definition covers. On the contrary, if the definition stopped immediately after the words “different purchasers” it would be incomplete and absurd. For the only purchasers who would then be in any “class” would, apparently, be those purchasers as to whom a particular dealer had, in March 1942, adopted a “practice” of “setting different prices.” Since all after-acquired customers, and also all old customers as to whom no such practice was in force in March 1942, would be in no “class,” and since the Maximum Price Regulation is expressed in terms of “class,” it follows that a dealer would be free, under the suggested short definition, to raise his prices without limit to all such customers. The final portion of the actual definition therefore remains very important when the phrase “different purchasers” has been given its full meaning. Again, it has been urged that low rates to favored customers should disappear because the competitive conditions which produced them have disappeared. As an economic argument, this attacks the whole theory and purpose of price regulation, which are to prevent changes in competitive conditions from producing the price increases which they would produce in the absence of regulation. As a legal argument, it conflicts with Maximum Price Regulation 165. A purchaser may change from wholesaler to retailer, for example; but no one can change from a purchaser who did to one who did not, in March 1942, regularly pay “different prices” from other purchasers. Accordingly, classification on the one basis may change but classification on the other basis cannot. When members [275] of one class of purchasers change into another class the maximum price of the new class is applicable to them; but a mere change in the competitive or other conditions which led to a purchaser’s getting into a given class does not, so long as he remains in the “same class,” carry with it any change in the applicable maximum price. Shortly after the Regulation was issued, the Administrator published Maximum Price Regulation No. 165, Manual No. 2, in which.he said.(p. 21): “Whether one class of customer is or is not the same as another class depends principally on your own business practice. If you customarily recognized one class as differing from another by charging different prices, you will be required to continue treating them as different classes.” Again, on September 22, 1942, the Administrator issued the following official statement: “Frequently, of course, a seller may have had the practice of giving a customer special low prices with the complete absence of any criteria which can be objectively applied * * *. In such a case, this buyer is in a separate class by himself; his class was established by the seller’s practice of giving him a lower price.”3 Appellant could not reasonably have relied, and makes no claim to have relied, on interpretations of the General Maximum Price Regulation which were expressed in terms of the sale of goods and were contained in a Bulletin published in May, 1942, before Maximum Price Regulation 165 had been issued. Though the definition, and therefore the Regulation, were clear on analysis, they may have been somewhat ambiguous on casual reading, in the limited sense that some casual readers might overlook the words “different purchasers.” But this does not aid appellant. The fact that a casual reader may eliminate words from a document does not justify a court in doing so. Moreover, on August 26 and again on November 16, 1943, the Office of Price Administration expressly told appellant4 that its price increases were in violation of the Regulation. Appellant nevertheless continued to violate the Regulation and was still violating it when appellee filed this suit in January, 1944. Appellant does not even contend that its violation was due to any doubt or misapprehension on its part as to the meaning which the Office of Price Administration intended the Regulation to convey. It relies entirely on the erroneous contention that the Regulation did not in fact convey the meaning which appellee has attributed to it. Affirmed. Footnotes [1] 7 Fed.Reg. 4734, 4737, June 25, 1942. Italics supplied. [2] Bowles, Adm’r. v. Nu Way Laundry Co., 10 Cir., 144 F.2d 741. [3] Office of Price Administration Service, p. 11:968. [4] In July 1943, an O.P.A. inspector erroneously told appellant that its price increases were lawful. But appellant made the increases before it got this erroneous advice, and continued them in effect after it got correct advice. It is therefore clear that the increases were not due to the erroneous advice. Appellant does not suggest that its conduct was influenced, at any time, by any advice from the Office of Price Administration. Moreover the inspector had no power to bind the Office of Priee Administration. Revised Procedural Regulation No. 1, §§ 1300.51-1300.52, 7 Fed.Reg. 8961, 8965, amended 8 Fed.Reg. 3313; cf. Nichols & Co. v. Secretary of Agriculture, 1 Cir., 131 F.2d 651, 658, 659, reversed on other grounds, 136 F.2d 503.