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Shotkin v. Nelson

December 13, 1944


Appeal from the District Court of the United States for the District of Colorado; J. Foster Symes, Judge.


Before PHILLIPS, HUXMAN and MURRAH, Circuit Judges.

HUXMAN, Circuit Judge.

This proceeding arises under the Second War Powers Act of 1942, 50 U.S.C.A. Appendix, ยง 633.*fn1 Appellant, Bernard M. Shotkin, by this consolidated appeal seeks to obtain a reversal of an order of the trial court denying him a temporary injunction in case No. 752, and of an order entered in case No. 11,800 requiring him to respond to a subpoena duces tecum, and produce the records required therein for inspection by the Compliance Commissioner of the War Production Board.

Appellant is engaged in the pruchase and sale of electric and lighting fixtures and equipment, including fluorescent fixtures, in Denver, Colorado. He conducts his business under the names of Edison Power & Light Company, Chicago wholesale Merchandise Company, Dison Power & Light Company, the Light Company, and the Shotkin Electric Company. Appellees will be referred to collectively as appellees or the Compliance Commissioner.

Section 2(a)(2) of the Act provides that whenever the President is satisfied that fulfillment of requirements for the defense of the United States will result in a shortage in the supply of any material or of any facilities for defense or for private account or for export, he may allocate such material or facilities in such manner and upon such conditions as he may deem necessary or appropriate in the public interest and to promote the national defense.

Section 2(a)(3) empowers the President to require the keeping of records, the making of reports, the inspection of all books, records and writings, and the furnishing of information by persons or concerns subject to the provisions of the Act. The section further empowers the President to make all investigations which in his discretion are necessary or appropriate to the enforcement of the provisions of the Act.

Section 2(a)(4) empowers the President to administer oaths, to require by subpoena or otherwise the attendance of and testimony of witnesses, and the production of books and records.

Section 2(a)(8) of the Act authorized the President to set up a department or agency to administer the provisions of the Act. The War Production Board*fn2 was created for this purpose. In the administration of the Act it may lawfully and consitutionally exercise all the powers that the Prsident himself may exercise under the provisions of the Act.

The business in which appellant is engaged was determined to be essential to the war effort, and allocations of the merchandise in which he dealt were made and priorities were established by the Board under rules and regulations promulgated by it. Order L-78 is a directive which regulates appellant's business. The purpose of this order is to regulate the manufacture, assembly, sale and delivery of fluorescent lighting fixtures. Paragraph (d) of the order provides: "Records. all persons affected by this order shall keep and preserve for not less than two (2) years accurate and complete records concerning inventories, production and sales." Paragraph (e) provides: "Audit and Inspection. All records required to be kept by this order shall, upon request, be submitted to audit and inspection by duly authorized representatives of the War Production Board." After April 14, 1944, these provisions were deleted because their substance was fully covered by the current issue of Priorities Regulation No. 1.

In the administration of his duties under the Act, the Compliance Commissioner sought an examination of appellant's books and records.Appellant refused permission to examine his books. The Compliance Commissioner thereupon issued and served the following subpoena duces tecum upon appellant:

"You are hereby required, that all business and excuses being laid aside, you appear before Roger H. Wolcott, Compliance Commissioner of the War Production Board, in Room 522 Continental Oil Building, in the City and County of Denver, State of Colorado, on July 27, 1944, at 10:00 o'clock A.M., of that day, to testify concerning the purchase, use and sale at wholesale and retail of electrical and lighting fixtures and supplies by you, either in your own name or in the names of Edison Power and Light Company, Chicago Wholesale Merchandise Company, Dison Power and Light Company, the Light Company, or The Shotkin Electric Company or in the names of other companies.

"And you are hereby required to bring with you and produce at said time and place all sales invoices, purchase orders, preference rating records, accounts receivable, notes receivable, bookkeeping journals and general ledgers, and all inventories taken in 1943 and particularly the inventories of June 30, 1943 and December 31, 1943, showing the purchase, ownership and sale of electrical and light fixtures and supplies by you and by all and any of the companies above named, during the years 1943 and 1944 . . . "

While numerous assignments of error are presented for consideration of questions arising in the trial of the two cases, the entire controversy centers around the validity of this subpoena, and our ...

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