Source: https://supreme.justia.com/cases/federal/us/331/752/
Timestamp: 2019-04-22 08:43:12+00:00

Document:
1. Pursuant to the First and Second Renegotiation Acts, the Secretary of War and the War Contracts Adjustment Board, respectively, determined that appellant had realized excessive profits during two years on subcontracts under which it had supplied parts to contractors manufacturing war equipment for the Army, and the Under Secretary of War directed certain of appellant's customers to withhold and pay into the Treasury sums due appellant equal to such excessive profits (less tax credits) for the second of the years in question. After petitioning the Tax Court for redetermination and while such proceedings were pending, appellant sued in a federal district court for a declaratory judgment that the Renegotiation Acts are unconstitutional and for an injunction against further proceedings thereunder.
(a) The suit is premature, since appellant had not exhausted its administrative remedy before the Tax Court. Pp. 331 U. S. 764-774.
(b) The district court had no jurisdiction in equity, since appellant had a complete remedy at law by actions against the contractors to which it had supplied the parts. Pp. 331 U. S. 774-781.
2. Mere suggestions of claim for relief raising serious constitutional questions are not to be entertained upon dubious presentations or, most certainly, when the presentation reasonably may be taken as not intended to put them forward squarely and inescapably. P. 331 U. S. 763.
3. The doctrine of exhaustion of administrative remedies requires not merely the initiation of prescribed administrative procedures; it requires pursuing them to their appropriate conclusion and awaiting their final outcome before seeking judicial intervention. P. 331 U. S. 767.
4. Where Congress has clearly commanded that administrative judgment be taken initially or exclusively, the courts have no lawful function to anticipate the administrative decision with their own, whether or not, when it has been rendered, they may intervene either in presumed accordance with Congress' will or because, for constitutional reasons, its will to exclude them has been exerted in an invalid manner. P. 331 U. S. 767.
5. By providing in the Renegotiation Acts for administrative determinations of excessive profits by the War Contracts Price Adjustment Board and for redeterminations de novo by the Tax Court, Congress intended to secure uniformity of administrative policy and disposition, expertness of judgment, and finality of determination at least of those things which Congress intended to and could commit to such agencies for final decision. Pp. 331 U. S. 767-768.
6. Congress intended the Tax Court's functions with respect to redetermination of excessive profits under war contracts not only to be put in motion, but to be fully performed, before judicial intervention at the instance of one in appellant's position, even though constitutional questions are raised. P. 331 U. S. 771.
7. Where Congress clearly intended to require administrative determination, either to the exclusion of judicial action or in advance of it, a strong showing is required, both of inadequacy of the prescribed procedure and of impending harm, to permit short-circuiting the administrative process -- especially in the case of wartime legislation resting, at least in part, on war powers. Pp. 331 U. S. 773-774.
8. Appellant subcontractor has an adequate remedy at law by suits upon its contracts against its customers; since such suits are not forbidden expressly or impliedly by the Renegotiation Acts, they are not made dependent upon completion of the Tax Court proceedings, and there appears to be no reason why every question of constitutionality raised in this suit could not be presented and determined in such a suit. Pp. 331 U. S. 775-777.
9. Appellant's allegations that it would suffer irreparable injury as a result of the withholding of the funds due from its customers are insufficient to sustain the intervention of a court of equity, particularly to avoid or anticipate the congressionally authorized proceeding. Pp. 331 U. S. 777-778.
10. Nor, on the facts of this case, is the showing made concerning multiplicity of suits sufficient to justify intervention of a court of equity or the substitution of its extraordinary relief for what appears to be a dull, adequate, and completely available remedy at law. Pp. 331 U. S. 778-781.
62 F. Supp. 520 affirmed.
a Federal District Court for a declaratory judgment that the Renegotiation Acts are unconstitutional and for an injunction against further proceedings thereunder. The District Court dismissed the suit. 62 F.Supp. 520. On appeal to this Court, affirmed, p. 331 U. S. 781.
This case is the fourth in a series seeking here a determination of the invalidity, on constitutional grounds, of the First and Second Renegotiation Acts [Footnote 1] and allied legislation.
that the complaint had been rightly dismissed for want of equity jurisdiction, since the plaintiff had an adequate remedy at law by suit against its licensees, and also for want of a justiciable case or controversy.
"which would stop payment by the government of money lawfully in the United States Treasury to satisfy the government's, and not the Secretary's, debt to the appellant."
326 U.S. at 326 U. S. 374. Accordingly, we held that the Government was an indispensable party. Since it neither had been joined in the suit nor had consented to be sued in such a proceeding, it followed that the complaint had been properly dismissed.
In one other case, Macauley v. Waterman S.S. Corporation, 327 U. S. 540, constitutionality was not involved, but coverage of the Renegotiation Acts was put in issue. The suit was brought in a District Court for a declaratory judgment and to restrain further renegotiation proceedings affecting the specified contracts. The contractor had not sought a decision on coverage from the Tax Court. We held that the Tax Court has power to decide such questions in the proceedings authorized by § 403(e)(1) of the Second Renegotiation Act. Hence, under the authority of Myers v. Bethlehem Shipbuilding Corp. 303 U. S. 41, the complaint in the Waterman case also was held rightly to have been dismissed, in this instance for the plaintiff's failure to exhaust its administrative remedy.
to the constitutional questions, determination is sought of issues of coverage and other matters.
respects from that characterizing any of those proceedings. Hence, it becomes necessary to set forth with some particularity the facts and controlling issues.
Appellant is in the business of manufacturing diesel fuel injection equipment and precision parts, and aircraft precision parts. Its manufacturing activities, insofar as material, [Footnote 8] were carried on under subcontracts with government contractors. The contractor, in turn, furnished the completed aircraft or engines to the United States.
Following the fiscal year ended November 30, 1943, renegotiation proceedings were instituted under the Second Renegotiation Act. On January 11, 1945, the Under Secretary of War, as delegate of the War Contracts Price Adjustment Board, entered an order determining that appellant had realized excessive profits of $1,265,000. Deduction of tax credits reduced this amount to approximately $270,000. Appellant again filed a petition for redetermination with the Tax Court. [Footnote 11] Then followed this suit.
complaint sought to establish jurisdiction in the District Court, equitable in character, by showing the inadequacy of all available legal or other remedies. These included the pending Tax Court proceedings, possible suit in the Court of Claims following completion of the Tax Court's determination, and actions at law against appellant's customers, contractors with the Government to recover the amounts said to be due under their various contracts.
made, would be substantially a claim against the Government by way of setoff of the latter amount. Cf. Mine Safety Appliances Co. v. Forrestal, supra.
The Government has contested each of appellant's claims. But its primary contentions have been aimed at Aircraft's jurisdictional showing. It argues that the suit, in substance and legal effect, is one against the United States, to which there has been no governmental consent, cf. Mine Safety Appliances Co. v. Forrestal, supra; that the suit is premature, because the Tax Court proceedings have not been completed and, until this has been done, Aircraft will not have exhausted its administrative remedy, cf. Macauley v. Waterman S.S. Corporation, supra; that the Tax Court has been given exclusive jurisdiction in renegotiation matters, and that, in any event, there is no jurisdiction of an equitable character in the District Court to afford the relief appellant seeks, since it has an adequate remedy at law by suit upon its contracts to recover any amounts due from its customers, in which all questions of constitutionality may be determined. Cf. Coffman v. Breeze Corporation, supra.
In the latter connection appellee Hirsch, as chairman of the Board, has filed an affidavit admitting that he and the other appellees, unless restrained, will take steps, as appellant alleges, to prevent payment of the $270,000 by its customers to it, and also to secure payment of that sum into the Treasury. The affidavit sets forth, however, that direction for payment will not be required or made as to more than two or three of appellant's customers, and, in the event this does not result in payment of the full amount, the Government will proceed to collect whatever may remain by suit against appellant.
its customers. Rather, it was set forth that collection of any such amount could be made only by direction to some sixteen or more customers. And, on the same basis, it is asserted that Aircraft's remedy by suit against its customers would require institution of numerous actions in different jurisdictions, resulting in expense and delay, as well as loss of goodwill and incurring the continued risk of the customers' solvency. [Footnote 16] Accordingly, Aircraft claims that jurisdiction in equity is conferred upon the District Court both by reason of the multiplicity of suits involved in asserting the legal remedy by actions against its customers and because of the injurious consequences which would follow from pursuing that course.
think, a strategic decision to avoid the difficulties which would follow upon its definite and unequivocal assertion, on the score of the nature of the suit as being one in fact and function against the Government. Something more than a mere suggestion of claim or relief is required to bring into play judicial power of affording remedy, especially when it appears there may be good reason deliberately accepted for going no further. This is reinforced when the suggestion, if acted on, would involve the Court in decision of serious constitutional questions. They are not to be entertained upon dubious presentations or, most certainly, when the presentation reasonably may be taken as not intended to put them forward squarely and inescapably. Cf. Rescue Army v. Municipal Court, 331 U. S. 549; Alma Motor Co. v. Timken-Detroit Axle Co., 329 U. S. 129. Accordingly, we put to one side the lengthy allegations concerning the 1942 determination, and confine our consideration to the issues relating to the redetermination made for the fiscal year of 1943.
These also, the Government urges, substantially are effective to make the suit one against the Government, to which it has not consented. And for this view likewise it relies upon the Mine Safety decision, as well as others. [Footnote 18] Appellant undertakes to distinguish the cases upon the basis that, in the Mine Safety case, the official action sought to be enjoined was conduct effective to stop the payment of funds out of the Treasury, whereas here, the analogous conduct affects no funds in the Government's actual possession, but seeks only to touch moneys held by third persons for appellant's or the Government's account. The difference, it is urged, is between action affecting only the withholding of government moneys and action effective to bring about collection from third persons of moneys claimed to be due to the Government.
That difference indeed may be substantial. But we do not decide whether it is sufficient to enable the appellant to avoid the difficulty presented of foreclosing the Government's claim by a suit brought only against its officials, essentially as trespassers, [Footnote 19] without joining the Government itself. In other words we do not determine whether the suit is, in legal effect, one against the Government, since, in our opinion, the other grounds going to the District Court's jurisdiction are adequate to sustain its dismissal of the cause.
"Upon such filing, such court shall have exclusive jurisdiction, by order, to finally determine the amount, if any, of such excessive profits received or accrued by the contractor or subcontractor, and such determination shall not be reviewed or redetermined by any court or agency."
Internal Revenue Code in redetermining a deficiency in taxes. Moreover, § 403(e)(1) commands: "The filing of a petition under this subsection shall not operate to stay the execution of the order of the Board under subsection (c)(2)."
"The legislative history of the Renegotiation Act, moreover, shows that Congress intended the Tax Court to have exclusive jurisdiction to decide questions of fact and law, [Footnote 23] which latter include the issue raised here of whether the contracts in question are subject to the Act."
"the District Court would have to decide this issue in the first instance. Whether it ever can do so or not, it cannot not now decide questions of coverage when the administrative agencies [Footnote 24] authorized to do so have not yet made their determination. Here, just as in the Myers case, the administrative process, far from being exhausted, had hardly begun. The District Court consequently was correct in holding that it lacked jurisdiction to act."
Id. 327 U.S. at 327 U. S. 544-545.
have said, raised only questions of coverage, not issues of constitutionality. Here, both types of question are presented. On the other hand, the cases are substantially identical in the nature of the relief sought. Each complaint asked for a declaratory judgment upon the legal issues and for injunctive relief restraining further action looking toward application of the Act's provisions.
We do not think the differences mentioned are sufficient to distinguish the cases for purposes of applying the exhaustion rule. Certainly no such effect can be derived from the fact that, in the Waterman case, the plaintiff had not begun the administrative process, while here, Aircraft has gone as far as it can. The doctrine, wherever applicable, does not require merely the initiation of prescribed administrative procedures. It is one of exhausting them -- that is, of pursuing them to their appropriate conclusion -- and, correlatively, of awaiting their final outcome before seeking judicial intervention.
of administrative policy and disposition, [Footnote 25] expertness of judgment, and finality in determination at least of those things which Congress intended to and could commit to such agencies for final decision.
It is equally clear that Congress intended to endow the Tax Court's decisions with a very large degree of finality, as appears from the very terms of § 403(e)(1), from the whole structure of the Act, and from the legislative history. [Footnote 30] The express command of § 403(e)(1) is not simply that the Tax Court shall have "exclusive jurisdiction, by order, to finally determine" the amount of excessive profits, if any. It is also that the determination "shall not be reviewed or redetermined by any court or agency." This is buttressed by the prohibition that filing the petition shall not operate to stay execution of the Board's order under § 403(c)(2). [Footnote 31] And not irrelevant to the statute's general policy of finality are the provisions making the Board's determinations final if the petition for Tax Court redetermination is not filed in the specified time, and those of the Secretary or his delegates final if similar action is not taken to secure redetermination by the Board. § 403(c)(1).
True, the statute expressly confers rights to follow through the various stages of the procedure to the end of the Tax Court phase. Nevertheless, its entire structure indicates the congressional purpose to have matters of renegotiation promptly and expeditiously settled, and to accomplish this as far as possible both by informal negotiations and by introducing the compulsion of finality at every stage unless each succeeding one is taken as commanded.
saving the right of resort eventually to the Tax Court to those acting promptly in the prescribed way.
We do not express any opinion -- indeed, we explicitly reserve decision -- upon the question of the finality of Tax Court decisions in these matters. But we cannot infer from a statute so conditioned in background, purpose, terms, and compulsion derived from the inevitable circumstances of its application that Congress intended to allow skirting the procedures devised altogether or partially -- more particularly in any case where following them could result in no greater loss than the delay and inconvenience which would flow from inability to seek some other remedy not dependent upon their completion.
We are not forced in this case, however, to decide whether Congress intended to give the Tax Court the last word upon all questions of fact and law, or whether it could do so if that were surely its purpose. Nor need we become involved in an attempt to decide what particular questions it might have left, or did leave, for that body's final and conclusive disposition. For it seems obvious, in view of the Act's terms, history, objects and the policies incorporated, that Congress clearly, and at the very least, intended the Tax Court's functions not only to be put in motion, but to be fully performed, before judicial intervention should take place at the instance of one in appellant's position.
This, indeed, was the ruling of the Waterman case. And we do not think the effect of that ruling is exhausted simply because constitutional questions were not raised there, but have been put forward in this cause. Nor is it overcome, in our judgment, by the showing which has been made on this record of irreparable injury and of the need, as well as the power, of equity to forestall the complete operation of the congressionally prescribed procedure.
On the contrary, whatever may be true of other situations, [Footnote 34] in this case, the very fact that constitutional issues are put forward constitutes a strong reason for not allowing this suit either to anticipate or to take the place of the Tax Court's final performance of its function. When that has been done, it is possible that nothing will be left of appellant's claim, asserted both in that proceeding and in this cause, concerning which it will have basis for complaint.
of these matters of coverage, which we held in the Waterman case are initially, at least, for its disposition, well might render consideration of the constitutional questions by it unnecessary and this cause moot.
Certainly that possible outcome should not be anticipated, either here or by the District Court, through a decision in this case on the constitutional issues. Rescue Army v. Municipal Court, 331 U. S. 549. No more should it be forestalled by decision upon the matters of coverage. Macauley v. Waterman S.S. Corporation, supra.
of the prescribed procedure and of impending harm, to permit short-circuiting the administrative process. Congress' commands for judicial restraint in this respect are not lightly to be disregarded.
"only if we could say in advance of resort to the statutory procedure that it is incapable of affording due process to petitioners could we conclude that they have shown any legal excuse for their failure to resort to it or that their constitutional rights have been or will be infringed,"
Yakus v. United States, 321 U. S. 414, 321 U. S. 435, a statement implicitly requiring exhaustion, not merely initiation, of the statutory procedure.
We need not decide in this case, however, whether mere doubt concerning the adequacy of administrative or other relief would be sufficient for allowing anticipation of the administrative determination. For that course is not to be followed if there is another remedy, not inconsistent with the congressional command, and of certain character, even though it be neither so expeditious or convenient as some other sought to be substituted which circumvents that command. To this, of course, should be added the further qualification that following the prescribed remedy, upon the showing made, will not certainly or probably result in the loss or destruction of substantive rights.
This brings us to consideration of the showing made here in support of equity's intervention. That showing, we think, when considered in the light of the foregoing principles and of the statute's clear purpose and intent, is not sufficient.
such a mandate is present is entirely different from one tendered in its absence. The very fact that Congress has made the direction must be cast into the scales as against the factors which, without that fact, would or might be of sufficient weight to turn the balance in favor of allowing utilization of equity's resources. That fact itself may be of such weight as to turn the scales the other way even in situations much more doubtful than the present one. In short, the so-called general principles governing the exercise of jurisdiction in equity are not to be taken in such a case as isolated from all effect of the legislative mandate, or necessarily or even readily as overriding it.
why every question of constitutionality which has been raised in this suit could not be presented and determined in such a suit.
"Each contractor and subcontractor is hereby indemnified by the United States against all claims by any subcontractor on account of amounts withheld from such subcontractor pursuant to this paragraph."
Accordingly, there would seem to be no substantial reason for regarding the suit against the contractor as inherently inadequate or ineffective for the protection of any rights of the appellant, including constitutional ones.
In this respect, the case stands identically with Coffman v. Breeze Corporations, supra. [Footnote 41] If any such inadequacy exists, it must be by virtue of factors extraneous to the nature of the suit itself, and not present in the Coffman case.
to appellant's assuming, for the period necessary to secure either the Tax Court's decision or final judgment in suits against its customers directed to withhold, the continued risk of their solvency, without specific allegation that any of them is seriously so threatened or facts to support such a claim, and to deprivation, for the same period, of the use of $270,000 directed to be withheld. [Footnote 43] We do not think this showing alone, without regard to multiplicity, approaches what would be required to sustain the intervention of a court of equity, particularly in order to avoid or anticipate the congressionally authorized proceeding.
the other hand stands the affidavit of appellee Hirsch that direction for withholding and payment into the Treasury will not be needed or given in more than two or three instances, and, in case any balance should remain, it will be collected through suit instituted by the Government.
Moreover, it is not apparent -- at any rate, from the allegations -- why it would be necessary for appellant to sue all of the sixteen customers, or indeed perhaps more than one of them, in order to secure a determination of its constitutional rights or preserve its rights. A single test suit would serve the former purpose fully, and there are no allegations of fact sufficient to show that appellant's rights of recourse against others probably would be lost by awaiting the outcome of such a suit, either legally through the operation of statutes of limitations or practically, as we have said, through any probable incidence of insolvency.
Whatever might be true in other circumstances, this showing as to the necessity for suing many customers is hardly sufficient to justify the substitution of equity's extraordinary relief for what in all the conditions of this case appears to be a full, adequate, and completely available remedy at law. Coffman v. Breeze Corporations, supra; Macauley v. Waterman S.S. Corporation, supra.
because of these future contingencies."
327 U.S. at 327 U. S. 545.
This case is perhaps even stronger than the Waterman case for application of the Myers rule. For here, the appellant is a subcontractor retaining what the contractor complainant did not have in the Waterman case -- namely, a completely adequate remedy at law against its customers, buttressed by the Government's guaranty of indemnity to the contractor for all liability incurred by him on account of withholding funds allegedly due the appellant.
In view of that fact, the further one that constitutional issues are included among those tendered in this case, but were not presented in the Waterman case, becomes wholly immaterial. To countenance short-circuiting of the Tax Court proceedings here would be, under all the circumstances, but more especially in view of Congress' policy and command with respect to those proceedings, a long overreaching of equity's strong arm.
The First Renegotiation Act was contained in § 403 of the Sixth Supplemental National Defense Appropriation Act, 56 Stat. 226, 245, as amended 56 Stat. 798, 982, 57 Stat. 347, 57 Stat. 564. The Second Renegotiation Act appears in the 1943 Revenue Act. 58 Stat. 21, 78, as amended 59 Stat. 294.
Of October 31, 1942, 56 Stat. 1013, 35 U.S.C. §§ 89-96.
The War Contracts Price Adjustment Board is created by § 403(d)(1) of the Second Renegotiation Act, 50 U.S.C. App. § 1191(d)(1). The present appellees were substituted by an order of the District Court as successors in office of the original defendants.
See note 9 The Tax Court proceedings remain pending and undetermined at the date of this decision.
On appellant's application, the District Court enjoined the defendants, pending determination of the appeal, from taking further action to enforce the statutes, particularly by notifying or requiring appellant's customers to pay into the Treasury of the United States moneys alleged to be due Aircraft under contract provisions, but claimed by appellees to be payable to the Government as excessive profits pursuant to the Acts' terms. Cf. notes 10 13 infra.
"Any contractor or subcontractor . . . aggrieved by a determination of the Secretary made prior to the date of the enactment of the Revenue Act of 1943, with respect to a fiscal year ending before July 1, 1943, as to the existence of excessive profits."
"Upon renegotiation, the Secretary is authorized and directed to eliminate any excessive profits under such contract or subcontract . . . (iii) by directing a contractor to withhold for the account of the United States, from amounts otherwise due to the subcontractor, any amount of such excessive profits under the subcontract. . . ."
An earlier petition was dismissed on motion of the United States because it was filed during the time when the War Contracts Price Adjustment Board might have initiated a review. Cf. Macauley v. Waterman S.S. Corp., 327 U. S. 540. After dismissal of the earlier petition and before filing of the later one, appellant had sought redetermination, pursuant to § 403(e)(1) of the Second Renegotiation Act, by the War Contracts Price Adjustment Board. The Board denied review and adopted the Under Secretary's redetermination as its own.
For example, in addition to contentions that the Renegotiation Acts, as a matter of substantive law, violate Article I, § 1, of the Constitution in that they constitute unlawful delegations of legislative power as well as contravene the due process and just compensation provisions of the Fifth Amendment, the jury trial provision of the Seventh Amendment, and the Tenth Amendment, it is said that the order under the Second Renegotiation Act was based in part at least on information said to have been obtained from "governmental and other reliable sources" which the appellant has had no opportunity to examine or rebut.
"Upon the making of an agreement, or the entry of an order, under paragraph (1) by the Board, or the entry of an order under subsection (e) by The Tax Court of the United States, determining excessive profits, the Board shall forthwith authorize and direct the Secretaries or any of them to eliminate such excessive profits (A) by reductions in the amounts otherwise payable to the contractor under contracts with the Departments, or by other revision of their terms; or (B) by withholding from amounts otherwise due to the contractor any amount of such excessive profits; or (C) by directing a contractor to withhold for the account of the United States, from amounts otherwise due to a subcontractor, any amount of such excessive profits of such subcontractor; or (D) by recovery from the contractor, through repayment, credit, or suit any amount of such excessive profits actually paid to him; or (E) by any combination of these methods, as in deemed desirable. . . ."
"Notwithstanding the fact that the plaintiff has filed its petition for redetermination in The Tax Court of the United States whereby it seeks an orderly determination of the amount, if any, it may owe to the United States of America, as excessive profits for its fiscal year ending November 30, 1943, the War Contracts Price Adjustment Board, purporting to act under the provisions of Section 403(c)(2) of the Renegotiation Act, purposes to direct the defendant Henry L. Stimson, Secretary of War, or his delegates, to direct contractors, customers of the plaintiff, to withhold moneys due to the plaintiff by such contractors for the account of the United States in amounts determined by it, the War Contracts Price Adjustment Board, to be due as excessive profits, and Henry L. Stimson, Secretary of War, or his delegates proposes to follow such directions of the War Contracts Price Adjustment Board, and further to direct such contractors to pay such sums of money into the Treasury of the United States in accordance with the procedure adopted by Henry L. Stimson, Secretary of War, acting through his delegate, Robert P. Patterson, in respect of excessive profits found by him to be due for the fiscal year of the plaintiff ending November 30, 1942, as heretofore, recited in this complaint, before The Tax Court of the United States of America shall have made or shall have had opportunity to make any determination of the plaintiff's petition for a redetermination of its excessive profits, if any, for its fiscal year ending 1943."
"stop payment by the government of money lawfully in the United States Treasury to satisfy the government's, and not the Secretary's, debt to the appellant,"
nevertheless would amount to "an indirect effort to collect a debt allegedly owed by the government in a proceeding to which the government has not consented," 326 U.S. at 326 U. S. 374-375, and to which, as in that case, it has not been made formally a party.
Especially Louisiana v. McAdoo, 234 U. S. 627; Belknap v. Schild, 161 U. S. 10; In re Ayers, 123 U. S. 443.
Appellant's claim is that ordering its customers not only to withhold funds due to it under the contracts but also to pay them into the Treasury would be, in effect, a "trespass upon its property" within the rule of United States v. Lee, 106 U. S. 196; cf. Land v. Dollar, 330 U. S. 731, and that execution of such orders would deprive it of vested property rights, contrary to various constitutional provisions. Since a decision of the constitutional issues would determine the Government's right to the funds in any event, the case, like Land v. Dollar, supra, would seem to be one "where the question of jurisdiction [as involving the Government's immunity to suit] is dependent on decision of the merits." 330 U.S. at 330 U. S. 735.
"In the absence of the filing of a petition with The Tax Court of the United States under the provisions of and within the time limit prescribed in subsection (e)(1), such order shall be final and conclusive, and shall not be subject to review or redetermination by any court or other agency."
Similarly, a limitation of one year is placed upon "all liabilities of the contractor or subcontractor for excessive profits received or accrued" during each fiscal year. See § 403(c)(3).
Citing, at 90 Cong.Rec. 1355, the statement of a sponsor in the House that the Tax Court could decide "all questions of fact and law. . . ." See also notes 30 35 infra.
The Waterman S.S. Corporation not only had failed to file a petition with the Tax Court, but also had refused to attend renegotiation conferences with the Board, or to supply information sought by it.
"insistence in Congress that coordination between the departments having renegotiating authority under the prior act be not a matter of voluntary cooperation, but one of statutory necessity."
Steadman, A Further Legal Inquiry Into Renegotiation: I (1944) 43 Mich.L.Rev. 1, 6.
"The Board of Tax Appeals (hereinafter referred to as the 'Board') shall be continued as an independent agency in the Executive Branch of the Government. The Board shall be known as The Tax Court of the United States, and the members thereof shall be known as the presiding judge and the judges of The Tax Court of the United States."
"That court will have exclusive jurisdiction, by an order, to make a final determination as to whether excessive profits have been received or accrued, or whether a fair price has been determined, and The Tax Court's determination may not be reviewed or redetermined by any other court or agency."
"The committee has provided that any contractor aggrieved by a determination of excessive profits under the old law, whether he was cooperative and signed a closing agreement or not, may have a review of that determination in the Tax Court of the United States and in the review have all issues, constitutional and otherwise, decided by the court."
"Wartime procurement for the military establishment differs radically from procurement in times of peace. Speed in production at once becomes all-important. . . ."
". . . the war procuring agencies cannot use normal methods of procurement. The pressing need for speed requires the abandonment of drawn-out negotiation and the careful surveys of all relevant factors which sound purchasing would otherwise require. Competition necessarily wanes, and no longer offers an adequate guide to the prices which should be paid. Above all, the forecasting of costs of production becomes, in large measure, a matter of informed guessing, rather than of real cost analysis."
The Second Renegotiation Act separated the repricing authority from renegotiation. See 58 Stat. 92, 50 U.S.C. App. § 1192. See also S.Rep. 627, 78th Cong., 1st Sess., 37-38.
See notes 23 30 supra; cf. Helvering v. Independent Life Ins. Co., 292 U. S. 371, rev'g Commissioner v. Independent Life Ins. Co., 67 F.2d 470, aff'g 17 B.T.A. 757; Stein Bros. Mfg. Co. v. Secretary of War, 7 T.C. 863.
"only $2,207,574.95, in any event, were subject to renegotiation; that $1,312,250.07 of its total sales were of 'Standard Commercial Articles' as defined in the Renegotiation Act; were articles sold under competitive conditions affecting the sale thereof in a manner which reasonably protected the Government against excessive prices, and, as such, were not subject to renegotiation; that $29,020.48 of its total sales were not sold for the ultimate use of the United States of America or any department, agency or instrumentality thereof, but were made and sold for civilian use, and, as such, were not subject to renegotiation."
Thus, the Court has permitted resort to a federal court of equity where a state was enforcing confiscatory rates and, by its law, precluded a stay or supersedeas until the state courts, "acting in a legislative capacity," had taken final action. Oklahoma Natural Gas Co. v. Russell, 261 U. S. 290; Pacific Telephone & Telegraph Co. v. Kuykendall, 265 U. S. 196; Porter v. Investors Syndicate, 286 U. S. 461. For other decisions holding that a federal court may exercise its equitable jurisdiction where there is an inadequate state remedy to correct a constitutional wrong, see Hillsborough v. Cromwell, 326 U. S. 620; Wallace v. Hines, 253 U. S. 66.
The rule has been applied most frequently in respect to state, rather than federal, administrative action, though, of course, it is not inapplicable to the latter, notwithstanding the power of Congress to regulate the jurisdiction and procedure of the federal courts may present obstacles to its application not present in state cases.
It is unnecessary to consider whether, in such a suit, a district court should find it proper to defer its final decision until after the Tax Court had made it final redetermination, in order possibly to avoid the necessity of deciding the constitutional questions. Cf. American Federation of Labor v. Watson, 327 U. S. 582, 327 U. S. 599, and cases cited. For, even in the event of such action, the court would have power to preserve, pending the administrative decision, the status quo and all rights of the appellant. The provision in § 403(e)(1) that the filing of a petition with the Tax Court "shall not operate to stay the execution of the order of the [War Contracts Price Adjustment] Board" under § 403(c)(2) does not mean that the courts are deprived of their power to grant stays where necessary. "Where Congress wished to deprive the courts of this historic power, it knew how to use apt words. . . ." Scripps-Howard Radio v. Federal Communications Commission, 316 U. S. 4, 316 U. S. 17. It did so in the Emergency Price Control Act of 1942, 56 Stat. 23; see Yakus v. United States, 321 U. S. 414, 321 U. S. 429, 321 U. S. 437, using very explicit language. Here, the provision -- literally, at any rate -- appears to mean only that there shall be no automatic stay by virtue of filing the petition in the Tax Court.
The paragraph covers withholding payment pursuant to direction by the Board to the contractor for the account of the United States. See note 13 supra.
"But whether the provisions of the Act be valid or invalid, appellants show no ground for equitable relief. If valid, they would be a defense, and appellant would be entitled to no relief other than that afforded by the suit against the Government authorized by § 2 of the Act. If invalid, appellant's right to recover remains unimpaired. The sufficiency of the defense may be as readily tested in a suit at law to recover the royalties as by the present suit in equity to enjoin payment of the royalties into the Treasury. In either case, appellant would receive all the relief to which it shows itself entitled."
323 U.S. at 323 U. S. 323.
The Coffman decision stood squarely upon the grounding of the adequacy of the remedy by suit against the licensees, although it rested also upon the alternative ruling that there was no case or controversy. This was for the reason that the appellant asserted no right to recover the royalties, but asked only a determination that the Royalty Adjustment Act was unconstitutional "and, if so found, that compliance with the Act be enjoined, an issue which appellee . . . declines to contest." This, we said, made the prayer of the bill "but a request for an advisory opinion as to the validity of a defense to a suit for recovery of the royalties." 323 U.S. at 323 U. S. 323-324.
It is alleged that appellant, unless allowed to maintain this suit, will be caused unnecessarily to run the risk of impaired credit or insolvency of customers directed to withhold funds; that its working capital essential to carrying out its obligations with contractors and subcontractors would be reduced; that its operations "will be hampered, and its functions irreparably damaged, by the reduction of its working capital;" and that it will be forced either to continue supplying customers directed to withhold payment, impairing its assets and the interests of stockholders or, in the alternative, to refuse making such shipments with the asserted consequence of being unable to continue in business, "inasmuch as a substantial portion of its market for its products presently is prime contractors with the United States and subcontractors thereof."
Appellant also alleges that it "could not recover interest for the use of its money" in a suit against the United States in the Court of Claims, which on other counts it asserts is both unavailable and inadequate. There is no allegation, however, concerning interest as not being recoverable in suits against its customers. And, as we have pointed out above, the statutory indemnity provided for such contractors is in sufficiently broad terms to cover interest as well as any other liability incurred by them through authorized withholding -- a guaranty which certainly would not preclude recovery of interest by the suit against the contractors if terminated on the merits in appellant's favor.

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