United States v. Cohen Grocery Company
Statement of the Case.
Section 4 of the Food Control Act of August 10, 1917, as amended October 22, 1919, in denouncing and attaching a penalty of fine or imprisonment to the making by any person of "any unjust or unreasonable rate or charge in handling or dealing in or with any necessaries," must be construed as forbidding and penalizing the exaction of an excessive price upon the sale of a commodity. P. 88.
To that extent the section, since it sets up no ascertainable standard of guilt, is repugnant to the Fifth and Sixth Amendments to the Constitution, which require due process of law and that persons accused of crime shall be adequately informed of the nature and cause of the accusation. P. 89.
The mere existence of a state of war did not suspend these guarantees of the Amendments or relieve Congress from their limitations. P. 88.
This is one of several cases (see post, 98, 100, 102, 104, 106, 108, 109) involving the constitutionality, in part, of § 4 of the Act of August 10, 1917, c. 53, 40 Stat. 276, known as the Food Control or Lever Act, as amended by § 2 of the Act of October 22, 1919, c. 80, 41 Stat. 297, which is set out below. 
An indictment charged, in the first count, that the Cohen Company, a dealer in sugar and other necessaries, wilfully and feloniously made an unjust and unreasonable rate and charge in handling and dealing in a certain necessary, to wit, sugar, in that it wilfully and feloniously demanded of a person named, who made the purchase, a stated sum for a stated amount of sugar, which, as the company knew, was an unjust and unreasonable rate. The second count described a similar transaction.
The defendant successfully demurred and the case was brought here by the Government under the Criminal Appeals Act.
Argument for the United States.
The Solicitor General for the United States:
The first contention made against the statute is that the offense charged was not a crime under the laws of the United States until the passage of the Act of 1919, and that, at that time, Congress was without power to enact such legislation because actual hostilities in our war with Germany had ceased. The District Judge correctly held that this contention was not tenable. Stewart v. Kahn, 11 Wall. 493, 506; Ruppert v. Caffey, 251 U.S. 264; Hamilton v. Kentucky Distilleries Co., 251 U.S. 146.
The war conditions were such indeed as to make it imperative that Congress exert whatever power it had to encourage the production of necessaries and to regulate their prices.
The regulation of the prices of the necessaries of life is a proper governmental function which, when deemed necessary for the prosecution of a war, Congress may exercise. Munn v. Illinois, 94 U.S. 113, 124; Tucker's Blackstone, vol. 4, pp. 159, 160; Russell on Crimes, 7th ed., vol. 2, p. 1919; King v. Waddington, 1 East, 143, 163; Statute of Laborers, anno 1349, 2 Stat. of England, c. vi, pp. 26, 28; Statute of Herrings, anno 1357, id., p. 117. See also: 2 id., p. 162, anno 1363; 2 id., c. viii, pp. 313, 314, anno 1389; 3 id., c. xii, p. 196, anno 1433; 4 id., cc. viii, ix, p. 41, anno 1487; 4 id., c. v, p. 220, anno 1531; 4 id., c. ii, pp. 263, 264, anno 1533; 4 id., c. xiv, p. 439, anno 1536; 5 id., c. xxi, p. 347, anno 1549; 12 id., c. xviii, p. 77, anno 1709; Budd v. New York, 143 U.S. 517; Brass v. Stoeser, 153 U.S. 391; German Alliance Insurance Co. v. Lewis, 233 U.S. 389, 410.
It was impracticable to lay down any fixed and unvarying schedule of profits that would be reasonable. No rule that would fix a certain percentage of cost price as a legitimate profit could, with justice, be uniformly applied. The rate of profit that may be legitimately charged varies with the cost of handling different articles and in different lines of business.
The indictment is not open to the objection that it does not sufficiently give the defendant notice of the accusation, and is a good indictment unless it can be said that the act upon which it is based is unconstitutional.
The Act of 1919 is not subject to the objection that it is too vague and uncertain. The question is whether Congress may declare it to be a criminal offense to charge an unreasonable price for necessaries, leaving it to a jury to determine, from all the facts and circumstances, whether a particular charge is reasonable or unreasonable; or whether it is necessary for the act itself to provide a more definite standard by which the jury must be governed.
If the reasonableness of a rate or charge can be said to be a fact, then undoubtedly it may be left to the determination of the jury under the circumstances disclosed by the evidence.
Undoubtedly a statute creating an offense must use language which will convey to the average mind information as to the act or fact which it is intended to make criminal. United States v. Brewer, 139 U.S. 278, 288. But statutes describing crimes must necessarily be more or less general in their terms. It is impossible to fix rules of conduct to cover every circumstance or condition that may arise. It is perhaps equally impossible to frame a statute so that all men will agree as to just what circumstances will or will not constitute the crime denounced. There are certain standards both of law and of fact which may be assumed in enacting legislation. When these standards are invoked, a question of fact is presented for the jury to determine under the particular facts of each case, and it is no objection to the statute that it is necessary to invoke these external standards. Miller v. Strahl, 239 U.S. 426, 434.
To determine from the evidence in a given case what is reasonable or unreasonable is to perform exactly the same function which a jury performs when the question of negligence is submitted to it.
That the language used in this statute is not so general and uncertain as to be subject to constitutional objections would seem now to be definitely settled by recent rulings of this court. Waters-Pierce Oil Co. v. Texas, 212 U.S. 86; Nash v. United States, 229 U.S. 373.
If it can constitutionally be left to the jury to determine, from the facts and circumstances of a particular case, whether a given contract or combination unduly restricts competition or restrains trade, it is difficult to see any principle upon which it can be denied that the same jury may be left to determine, from a given state of facts and circumstances, whether a particular price demanded for necessaries is reasonable or unreasonable. Later cases have emphasized the rule laid down in the Nash Case. Omaechevarria v. Idaho, 246 U.S. 343; Arizona Employers' Liability Cases, 250 U.S. 400, 432. Distinguishing: International Harvester Co. v. Kentucky, 234 U.S. 216. United States v. Rosenblum, 264 Fed. Rep. 578, 582; United States v. Oglesby Grocery Co., 264 Fed. Rep. 691, 695.
This principle, as applied to this case, is not a new departure, but has consistently been applied to numerous criminal laws. See United States v. Oglesby Grocery Co., supra.
Counsel for Parties.
Mr. Louis B. Sher and Mr. Chester H. Krum for defendant in error.
Mr. William D. Guthrie, Mr. Benjamin F. Spellman and Mr. Bernard Hershkopf, by leave of court, filed a brief as amici curiæ.
Mr. John A. Marshall, Mr. D. N. Straup, Mr. Joel F. Nibley and Mr. Thomas Marioneaux, by leave of court, filed a brief as amici curiæ.
Mr. Chief Justice WHITE delivered the opinion of the court.
"That it is hereby made unlawful for any person willfully to destroy any necessaries for the purpose of enhancing the price or restricting the supply thereof; knowingly to commit waste or willfully to permit preventable deterioration of any necessaries in or in connection with their production, manufacture, or distribution; to hoard, as defined in section 6 of this Act, any necessaries; to monopolize or attempt to monopolize, either locally or generally, any necessaries; to engage in any discriminatory and unfair, or any deceptive or wasteful practice or device, or to make any unjust or unreasonable rate or charge in handling or dealing in or with any necessaries; to conspire, combine, agree, or arrange with any other person, (a) to limit the facilities for transporting, producing, harvesting, manufacturing, supplying, storing, or dealing in any necessaries; (b) to restrict the supply of any necessaries; (c) to restrict distribution of any necessaries; (d) to prevent, limit, or lessen the manufacture or production of any necessaries in order to enhance the price thereof; or (e) to exact excessive prices for any necessaries, or to aid or abet the doing of any act made unlawful by this section. Any person violating any of the provisions of this section upon conviction thereof shall be fined not exceeding $5,000 or be imprisoned for not more than two years, or both: Provided, That this section shall not apply to any farmer, gardener, horticulturist, vineyardist, planter, ranchman, dairyman, stockman, or other agriculturist, with respect to the farm products produced or raised upon land owned, leased, or cultivated by him: Provided further, That nothing in this Act shall be construed to forbid or make unlawful collective bargaining by any cooperative association or other association of farmers, dairymen, gardeners, or other producers of farm products with respect to the farm products produced or raised by its members upon land owned, leased, or cultivated by them."