Court Opinion

ID: 8597691
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:05:07.140381+00
Date Added: 2024-06-11T14:10:40.274294
License: Public Domain

NICHOLS, Judge,
concurring:
I agree with and join in Judge Bennett’s opinion, but I do not think the issue is quite so simple as he makes it appear. In the first place, practice as to use or nonuse of section 22 rates before 1976 is not directly relevant because 22 U.S.C. § 2792(b) was added only that year. Apparently some did not then immediately get the word, and practice by government shipping officials for a while was inconsistent. A controversy arose and before resolving it, the accounting officers received the views of the Department of Defense, which, by letter of March 4, 1977, over the signature of L. Nederlehner, Esquire, Acting General Counsel, advised that section 22 rates applied only when the government obtained "the direct and entire benefit of the special rates,” that a legal argument could be made either way, whether the United States or the foreign military buyer actually received such benefit, and that procurement activities would be advised that section 22 rates should not be applied in future, when the full reimbursement was recovered. As to completed transactions, it would be improper to bill the foreign customers for added transportation costs after the transaction was otherwise closed. In such circumstances it could be argued that a section 22 rate originally applied was justified because the government would have to bear the full nonsection 22 rate, if applicable.
This Solomon-like decision was unpersuasive to the government’s accounting officers to whom it was addressed. They insisted on recovering uniformly the excess of full rates over section 22 rates, using the usual offset procedure in completed transactions. They did not believe that the transportation costs, either full or reduced, were being passed on to the foreign customers.
After May 1, 1978, everyone had got their act together, full rates were paid the carriers, or specially agreed rates *433for this class of business, but in any case not section 22 rates, and reimbursement was obtained from the foreign customers to the satisfaction of accounting officers. The instant litigation relates to 1977 shipments.
Thus for the 1977 period application of the "direct and entire benefit” rule depends on whether one applies it to what was actually done or to what ought to have been done.
In my view the interpretation of the agency that administered the Foreign Military Sales program, the Department of Defense, at a period so soon after the new legislation was enacted, was entitled to more respect than it received from the accounting officers, nor did they weigh sufficiently the carriers’ legal rights in the premises. It was not fair or equitable, nor in accord with accepted principles of statutory construction, to impose a burden on the carriers they had not agreed to because a proper job was not being done in implementing the congressional intention to make the foreign third party pay the full administrative costs, including all transportation. Carriers had no way of knowing that statements on government bills of lading that section 22 rates were inapplicable could not be relied on because government officials were not collecting as they should be from these third parties. Thus, I come down strongly for applying the "direct and entire benefit” rule according to whether the government should by law have enjoyed the benefit, rather than whether, unknown to the carrier, it did not in fact.
While the GSA actually audited the bills of lading and made the disallowances, it did so under the overall supervision of the Comptroller General, who made the decision we here reverse. It is well known, of course, that he possesses the ultimate authority to disallow claims against the government including those that the executive branch considers just and fairly owed. His decisions of course receive great respect in the courts, but are not necessarily binding there. In this instance it is noteworthy that the Comptroller General did not contest the "direct and entire benefit” rule, but rather limited its application to cases where the actual realization of the "direct and entire benefit” is not undercut by maladministration elsewhere. This is a perfectly tenable position, though I consider it *434wrong. It is much easier for a court to say it is wrong, than it is for an accounting officer. It may indeed once in a while be improper for an accounting officer to resolve close and debatable questions against the government, and proper rather for him to let the courts do so, which is one of the things they are for.