ment House Owners Association v. United States 22 where the Government's position with respect to the controversial eight percent rent rule was completely vindicated. (See the paper dealing with Rent Control.)

The retroactivity issue, in a flood of wage cases involving pre-August 15 labor contracts, was resolved by the 1971 amendments to the Economic Stabilization Act, which were passed on December 22, 1971. The amended Act provided that wage increases contained in contracts entered into before the Freeze could be paid retroactively under specified circumstances. This amendment to the Act and the subsequent Pay Board regulations implementing it 23 rendered moot the pending wage litigation involving pre-Freeze contracts.

It appears that the judiciary was willing to support the policies behind the Stabilization Program, even to the extent of affirming retroactive effects where the responsible regulatory agency clearly and consistently interpreted the governing regulations. Although it is speculative, the Court in Jefferson Parish may have been willing to issue an injunction against the salary increases had it been able to rationalize its action with ES Reg. 1 and with the OEP circulars. Of course, the reasonableness of a policy embodying retroactive effects must be determined in relation to the need for an effective program. The courts, during the Stabilization Program, were willing to uphold regulations with retroactive effects based on the overriding national policy to deal firmly with the problems of inflation.

Retroactivity Notes

1: Report of the House Committee on Banking and Currency, 91-1330, 91st Congress, 2d Sess, at 9.

2. Id.

3. K. Davis, Administrative Law Text 133,34 (3d ed. 1972).

4. Executive Order 11615, 36 Fed. Reg. 15727 (1971).

5. Cost of Living Council Order No. 1, 36 Fed. Reg. 16215 (1971).

6. 342 F. Supp. 606 (C.D. Cal., 1972), 472 F.2d 1065 (T.E.C.A. 1972), cert. denied, 410 U.S. 928 (1973).

7. 342 F. Supp. at 608.

8. 337 F. Supp. 737 (D.D.C. 1971).

9. 342 F. Supp. at 608.

10. Brief for Defendants-Appellants at 12-13 (emphasis added).

11. OEP Circular No. 7, 36 Fed. Reg. 17578 (1971).

12. OEP Circular No. 11, 36 Fed. Reg. 18315 (1971).

13. 472 F.2d at 1072.

14. Cf. Manning v. University of Notre Dame Du Lac, 484 F.2d 501 (T.E.C.A. 1973) (procedural issue settled requiring complainant first demand refund before adjudication); Fagundez v. Oakland Raiders, 498 F.2d 1394 (T.E.C.A. 1974); and DeRieux v. The Five Smiths, Inc., No. 5-6, 5-7, 5-8 (T.E.C.A. June 20, 1974). cert. denied, 43 U.S.L.W. 3239 (Oct. 21, 1974). There were two types of football cases brought in Phase I. The first type, of which the Five Smiths (Atlanta Falcons) and University of Southern California cases are typical, involved teams which had not played a pre-season exhibition game at the new higher ticket price prior to August 15, 1971. The second type of case was typified by actions brought against the Miami Dolphins, Philadelphia Eagles

and Detroit Lions, which had in fact had exhibition games prior to the Freeze. Early in Phase II, it was concluded that this second type of case could be very difficult to successfully prosecute or defend by the government. There was little confidence that the courts would accept the argument that exhibition games were a "different product" in terms of the regulations, particularly in view of the fact that pre-season exhibition games and regular season games were sold as one package. Therefore, these latter suits were dropped by the Government.

15. Cf. Murphy v. O'Brien, 485 F.2d 671 (T.E.C.A. 1973).

16. 333 F. Supp. 418 (E.D. La. 1971).

17. Cf. OEP Circular Nos. 5, 13, 18 36 Fed. Reg. 17437, 18530, 19311.

18. 333 F. Supp. at 423-424.

19. 472 F.2d at n. 11.

20. 337 F. Supp. at 763.

21. Nos. 5-6, 5-7, 5-8 (T.E.C.A. June 20, 1974); cert. denied, 43 U.S.L.W. 3239 (Oct. 21, 1974).

22. 350 F. Supp. 1144 (E.D. Pa. 1972), aff'd per curiam, 482 F.2d 1400 (T.E.C.A. 1973).

23. 6 C.F.R. $§ 201.13, 201.15 (1972); later recodified 6 C.F.R. § 201.31, 201.36 (1973).

TAKING OF PROPERTY WITHOUT

JUST COMPENSATION

Another constitutional issue that was raised by some litigants is the question of the taking of private property without just compensation. Those against whom regulations were sought to be enforced frequently raised the claim of an uncompensated taking to escape the burden of the regulation. The Fifth Amendment provides in part: ". . . nor shall private property be taken for a public use without just compensation." This prohibition does not imply a broad grant of power to the federal government to take property, conditional upon payment. Rather the Amendment is a restriction on power which requires that if, under some other constitutional provision, authority to take private property is exercised, then the exercise of that power must conform to the provisions of this Amendment. Thus, before the issue of just compensation can be raised, a "taking" of property within the meaning of the Fifth Amendment must first be found. Litigants under the Stabilization Act were never successful in persuading the courts to find such a taking.

It has long been held that an otherwise valid regulation of property is not automatically to be considered a "taking of property" within the meaning of the Fifth Amendment. The general rule is that while property may be regulated to a certain degree, "if the regulation goes too far it will be recognized as a taking." The question of "taking," therefore, becomes a question of degree, not to be decided by general propositions, but rather upon the particular circumstances of each case.

In the context of wage and price controls, courts have been reluctant to find that degree of regulation which requires compensation for lost income. Economic stabilization demands strict adherence to the plan promulgated, and the temporary restraint on prices has been viewed as insignificant when compared with the widespread, uncompensated loss that results from spiraling inflation.2

As stated by T.E.C.A., in Local 11, IBEW v. Boldt "the extent of appropriate regulatory powers has never been held to constitute a taking, for although some wage-price controls may reduce the value of that being regulated, it does not follow that the regulation, per se, amounts to a taking. The Court found in that case that a Construction Industry Stabilization Committee (CISC) reduction in permissible wage increases (from $1.71 to one dollar) was not ultra vires and was in furtherance of the legitimate goal of stemming inflation. Likewise, in Western States Meat Packers Association v. Dunlop, T.E.C.A. relied on its holding in Pacific Coast Meat Jobbers Association v. Cost of Living Council that the imposition of the price ceiling on beef was a

5

valid exercise of the regulatory powers vested in the Council, and therefore concluded that there had been no taking.

Taking-Notes

1. Pennsylvania Coal Company v. Mahon, 260 U.S. 393 (1922).

2. Cf. United States v. Central Eureka Mining Company, 357 U.S. 155 (1958), Bowles v. Willingham, 321 U.S. 503 (1944), and Block v. Hirsh, 254 U.S. 135 (1920).

3. Local 11, IBEW v. Boldt, 481 F.2d at 1396.

4. 482 F.2d 1401 (T.E.C.A. 1973).

5. 481 F.2d 1388 (T.E.C.A. 1973).

Procedural Matters

A number of recurring procedural issues confronted Economic Stabilization Program agencies when their actions were reviewed by the courts, though none of these procedural issues are peculiar to the Stabilization Program.

EXHAUSTION OF ADMINISTRATION REMEDIES

The common administrative law doctrine requiring exhaustion of administrative remedies before seeking judicial relief was recognized by T.E.C.A. as applicable to causes of action arising under the Economic Stabilization Act. City of New York v. The New York Telephone Company, thoroughly examined the issue and applied the doctrine to hold that the City of New York, having failed to pursue those administrative remedies which the Price Commission had left open to it, could not later obtain judicial review of alleged violations of the Economic Stabilization Act in the matter of Price Commission action on New York Telephone Company's rate increases.

The case arose out of the implementation of a rate increase by the New York Telephone Company, which had been approved by the New York Public Service Commission. Under the Price Commission regulations then in effect (6 C.F.R. 300.16), a utility could, subject to certain procedural requirements, place into effect a rate increase, subject to later disallowance or modification of the increase by the Price Commission. The regulations also provided that any person having a direct interest in a price increase request could submit its views and any data pertaining to the request to the Commission, and the Commission would consider that submission in reaching its decision. The City of New York believed that N.Y. Telephone had failed to comply with certain of the Commission's requirements in implementing its rate increase. However, rather than submit its views to the Price Commission, the City of New York filed suit directly against N.Y. Telephone to enjoin the rate increase. Moreover, the City filed its suit while the Commission was still reviewing the rate increase and before it had taken final action on it.

The court in New York Telephone cited McKart v. United States,* for the basic policy considerations underlying the exhaustion doctrine. Agencies are delegated the responsibility for applying a statute in the first instance. Similar to trial courts, agencies usually have to develop the factual background on which a decision can be made. Further, the agencies should be given the opportunity to exercise their discretion within the mandated area, and apply their special expertise to the de