Before Hastings, Circuit Judge, and Perry and Hoffman, District
The opinion of the court was delivered by: Hoffman, District Judge.
This is a class action in which the plaintiffs seek an
injunction and a declaration that the Onion Futures Act
(hereafter "Act"), 72 Stat. 1013, 7 U.S.C.A. § 13-1, is
unconstitutional. The Act provides in relevant part that:
"* * * no contract for the sale of onions for
future delivery shall be made on or subject to the
rules of any board of trade in the United
Violation of the Act is a misdemeanor, and the maximum penalty is
a fine of $5,000.
The plaintiff Exchange is a board of trade within the meaning
of the Act. The other plaintiffs are connected with the Exchange
and are proper parties. The defendant has not questioned the
propriety of a class action.
The cause is presented to the court on the defendant's motion
for dismissal or summary judgment. In order better to appreciate
the issues raised by the motion, it is necessary to set forth a
history of this case from the date on which the original
complaint was filed.
On September 12, 1958, the plaintiffs filed their complaint
against Robert Tieken, United States Attorney for the Northern
District of Illinois, and William P. Rogers, the Attorney General
of the United States. In addition, the plaintiffs moved for the
convening of a three-judge court, and for a temporary restraining
order and a preliminary injunction to prohibit the defendants
from enforcing the provisions of the Act. A three-judge court was
convened. Thereafter, the defendants moved to dismiss the
complaint on the grounds (1) that the Act was constitutional; (2)
that the court lacked jurisdiction over the subject matter
because there was no justiciable controversy; and (3) that the
court lacked jurisdiction over the person of the Attorney General
who was alleged to be an indispensable party. On September 25,
1958, the plaintiffs filed an amendment and supplement to the
complaint. The complaint was then dismissed as to the Attorney
General. Since he had not been served within the territorial
limits of the court, the court lacked jurisdiction over him.
Blackmar v. Guerre, 1952, 342 U.S. 512, 72 S.Ct. 410, 96 L.Ed.
534; Goldberg v. Hoffman, 7 Cir., 1955, 225 F.2d 463. However,
the action was not dismissed in toto because the court concluded
that the Attorney General was not an indispensable party. See
Hynes v. Grimes Packing Co., 1949, 337 U.S. 86, 69 S.Ct. 968, 93
L.Ed. 1231; Williams v. Fanning, 1947, 332 U.S. 490, 68 S.Ct.
188, 92 L.Ed. 95.
On September 26, 1958, after full argument was heard, a
majority of the court temporarily enjoined the defendant from
enforcing the Act. By so doing, the majority rejected the
defendant's contentions that there was no justiciable controversy
and that the plaintiffs had not
made the requisite showing of irreparable injury.
On April 13, 1959, pursuant to leave first obtained, the
plaintiffs filed an amended complaint which was answered by the
defendant on April 24, 1959. The amended complaint contained
numerous detailed allegations intended to contradict the evidence
presented to Congress with reference to trading in onion futures.
The defendant moved to strike these allegations, contending that,
since the legislative record contained adequate and reasonable
grounds for the enactment of the legislation in question, the
court was precluded from taking additional evidence on this
matter. In opposition to the motion, the plaintiffs asserted that
they should be permitted to prove, by evidence extrinsic to the
legislative record, that the Act did not have a rational basis in
fact. In a memorandum opinion written by Circuit Judge Hastings,
the court concluded that:
"* * * the question is `at least debatable':
whether commerce in onions futures should be wholly
prohibited, and that, therefore, a rational factual
basis exists for the act." 177 F. Supp. 660, 666.
Accordingly, the court granted the defendant's motion to strike
as to paragraphs 13, 14, 16 through 23, and 25 through 31, which
paragraphs related to the facts found by Congress. See Galvan v.
Press, 1954, 347 U.S. 522, 74 S.Ct. 737, 98 L.Ed. 911; American
Communications Association v. Douds, 1950, 339 U.S. 382, 70 S.Ct.
674, 94 L.Ed. 925; Clark v. Paul Gray, Inc., 1939, 306 U.S. 583,
59 S.Ct. 744, 83 L.Ed. 1001; United States v. Carolene Products
Co., 1938, 304 U.S. 144, 58 S.Ct. 778, 82 L.Ed. 1234; Board of
Trade of City of Chicago v. Olsen, 1923, 262 U.S. 1, 43 S.Ct.
470, 67 L.Ed. 839; and Moore v. Chicago Mercantile Exchange, 7
Cir., 1937, 90 F.2d 735, certiorari denied 1937, 302 U.S. 710, 58
S.Ct. 30, 82 L.Ed. 548. In addition, the court granted the
defendant's motion as to paragraphs 6 through 11. Although these
allegations were descriptive of the nature of futures trading, it
was held that the court could
"* * * take judicial notice from the provisions of
the Commodity Exchange Act that futures trading is
generally accepted, under proper regulation, as a
useful and lawful business. See Title 7 U.S.C.A. §
5." 177 F. Supp. 660, 666.
On October 12, 1959, the defendant moved for dismissal or
summary judgment. The plaintiffs then moved the court to vacate
its order on the motion to strike. Also, the plaintiffs offered
to prove the facts in support of the stricken allegations.
However, the court denied the motion to vacate and rejected the
offer of proof. Consequently, there remained for consideration
only the defendant's motion for dismissal or summary judgment. On
November 10, 1959, the court unanimously granted the motion to
dismiss and dissolved the preliminary injunction. The order
stated that a memorandum would be filed in due course. This is
the memorandum referred to.
In support of the motion, the defendant contends (1) that there
is no justiciable controversy and (2) that the Act is
constitutional as a matter of law. With reference to the issue of
justiciability, the defendant asserts that the plaintiffs have
not made that showing of irreparable injury which warrants
enjoining the enforcement of a criminal statute. The same
assertion was made by the defendant in opposition to the
plaintiffs' motion for a preliminary injunction, and a majority
of the court rejected it. Although I believe that the defendant's
position is sound, Spielman Motor Sales Co. v. Dodge, 1935,
295 U.S. 89, 95-96, 55 S.Ct. 678, 79 L.Ed. 1322, the majority adheres
to its ...