Court Opinion

ID: 9338928
Source: CourtListenerOpinion
Date Created: 2022-12-16 17:43:53.365471+00
Date Added: 2024-06-11T17:15:17.279828
License: Public Domain

J. SKELLY WRIGHT, Circuit Judge
(dissenting):
I agree with the court that these cases command sympathetic consideration for these many thousands of Japanese-American appellants. Respectfully, I dissent from the court’s conclusion that we are powerless to provide relief.
Appellants were depositors of the Yokohama Specie Bank, Ltd. when the bank’s property in the United States was seized on Pearl Harbor Day and vested as enemy property under the Trading with the Enemy Act, 50 U.S.C. App. § 1 et seq., 40 Stat. 411. On August 8,1946, Congress enacted § 34 of the Trading with the Enemy Act, 60 Stat. 925, which authorized the Alien Property Custodian to pay from the vested proceeds the claims of former owners who were citizens or residents of the United States during World War II and who had not been interned or paroled as potentially dangerous alien enemies. Pursuant to § 34(b) of the Act, the Custodian fixed November 18, 1949, as the final date for filing claims against the Yokohama Bank. Appellants in Honda, No. 19,284, Kondo, No. 19,282, and Okamoto, No. 19,283, all filed timely claims. The Government refused to recognize the claims of appellants in Okamoto on the ground they were ineligible under the statute because they had been interned and paroled. This ruling was correct and disposes of that case.1
The claims of appellants in Honda and Kondo were recognized by the Custodian, however, to the extent that toward the end of 1958 they were sent letters as eligible claimants, instructing them to send in their original certificates of deposit or equivalent proof and informing them that if proper proof were submitted a recommendation would be made that their claims be allowed at the post-war rate of exchange, which amounted to approximately 2% of the pre-war rate. Appellants were further advised that any claim not timely submitted would be dismissed as abandoned. Appellants failed to comply with the requirements of the 1958 letter.
Around September 1961 the Custodian prepared and sent by registered mail to all claimants a Final Schedule of all Yokohama Bank depositor claims allowed and the proposed payment in each case. A Notice was included advising that “[i]f your claim is not shown on the Schedule, it is for the reason that the claim has been dismissed and disallowed by this Office”; that any claimant considering himself aggrieved “may, within sixty (60) days” file for judicial review; and that “[i]f no such complaint for re*363view is filed within the sixty-day period, payments to claimants will be made” in accordance with the Schedule. Appellants did not file for judicial review within 60 days of the letter, as required by § 34(f) of the Act.
In Abe (pronounced “Ah-bey”) v. Kennedy, a timely complaint, demanding payment at the pre-war rate, was filed in the District Court on behalf of all Yokohama Bank claimants who had complied with the Custodian’s 1958 letter. Proceedings in Abe were stayed pending the outcome of Aratani v. Kennedy, which involved the same issue with depositors of a different Japanese bank.
The District Court granted the Government’s motion to dismiss in Aratani, this court affirmed, 115 U.S.App.D.C. 97, 317 F.2d 161, 323 F.2d 427, and the Supreme Court granted certiorari, 375 U.S. 877, 84 S.Ct. 147, 11 L.Ed.2d 110 (1963). The Government then entered into a settlement with complainants in Aratani and Abe, which was referred to the District Court by the Supreme Court, 376 U.S. 936, 84 S.Ct. 790, 11 L.Ed.2d 657 (1964), and approved in 1964, D.D.C., 228 F.Supp. 706. The Abe settlement was for well over 60% of the amount claimed, and in fact came to approximately 100% of the original deposits without interest.2 Appellants’ petition to be included in the settlement was denied by the Government on the ground that they were not parties to the litigation being compromised. They then brought these actions. The District Court granted a Government motion to dismiss for lack of jurisdiction because the complaints were filed long after the 60-day limitation period prescribed by the Act. This appeal challenges the dismissal.
I
Appellants urge us, under the circumstances of this case, to estop the Government from asserting the 60-day statute of limitations. In addition to denying that any basis for estoppel is shown, the Government advances two arguments which would bar consideration of the plea.
The Government argues first that estoppel cannot be applied against it. It may be true that estoppel does not lie against the United States where its officers or agents, without authority, enter into agreements to do what the law does not sanction or permit. E. g., Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947); United States v. Stewart, 311 U.S. 60, 70, 61 S.Ct. 102, 85 L.Ed. 40 (1940). Compare Maguire & Zimet, Hobson’s Choice and Similar Practices in Federal Taxation, 48 Harv.L.Rev. 1281, 1299 (1935). But when the conduct relied upon as the basis for estoppel is authorized, estoppel has often been applied against the Government by a number of courts, including this one.3 Here, admittedly, the officers *364who communicated with appellants and who formulated the policy which resulted in the 1958 offer and the 1963 settlement all acted within their authority.
The Government’s second argument, that the 60-day limitation period for judicial review provided in the Act is “substantive” rather than “procedural” and therefore cannot be extended, is likewise unfounded. The suggestion seems to be that, since the limitation provision is included in the same Act which creates the right, the passage of time itself extinguishes the right. The Supreme Court rejected this argument in ruling that es-toppel may prevent a private party from pleading the “substantive” limitation period of the Federal Employers’ Liability Act. Glus v. Brooklyn Eastern Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959). See also United States for Use of E. E. Black Limited v. Price-McNe-mar Construction Co., 9 Cir., 320 F.2d 663 (1963) (estoppel applied in favor of the Government in Miller Act case despite “substantive” statute of limitations) . More recently, also in tolling the FELA limitation period, the Supreme Court said: “[T]he ‘substantive’-‘procedural’ distinction would seem to be of little help in deciding questions of extending the limitation period.” Burnett v. New York Central R. Co., 380 U.S. 424, 427 n. 2, 85 S.Ct. 1050, 1054, 13 L.Ed.2d 941 (1965). “[T]he basic inquiry is whether congressional purpose is effectuated by tolling the statute of limitations in given circumstances.” Id. at 427, 85 S.Ct. at 1054. Of course, Congress can make a limitation period inflexible, but in order to do so it must do more than merely place the limitation and the right in the same statute.
In deciding that the limitation period in FELA was not inflexible the Supreme Court, in Burnett, examined “the purposes and policies underlying the limitation provision, the Act itself, and the remedial scheme developed for the enforcement of the rights given by the Act.” 380 U.S. at 427, 85 S.Ct. at 1054. These cases meet the test of Burnett. There are no problems of notice or proof. Appellants’ claims, which the Government concedes are valid, were timely filed with the Custodian before 1949. The “Act itself” is remedial and humane. It was passed at the Custodian’s urgent request, in part for the benefit of the Government, and was designed to return to rightful creditors on an equitable basis, rather than according to a “first come, first served” rule, assets kept out of enemy hands.4 Both Congress and the Custodian recognized the strong moral obligation owed to rightful creditors.5 *365Certainly any application of equitable principle permissible under FELA, which is designed purely to benefit employees, is permissible here, where the Government also benefited, and where a strong moral obligation was recognized.
Moreover, there is nothing in the Act’s “remedial scheme” which indicates congressional intent to limit or preclude equitable extension of the limitation period. Section 34(f) does set out the 60-day requirement, but this only poses the issue rather than answers it.6 Neither does § 34(i), which provides that the sole relief for vested property claimants shall be that provided in the Act, indicate congressional intention to make the limitation period inflexible. This provision was designed only to prevent independent suits for recovery of property.7 Speed in resolving all claims was a matter of importance to Congress, but only as it related to the general purpose of effectuating an equitable distribution. Thus § 34(b) ordered the Custodian to fix “bar dates” within which debt claims could be filed, no later than two years from the date of vesting or of enactment. This enabled the Custodian to determine at one time which claimants were eligible, and to distribute each account equitably. Appellants complied with this fundamental requirement.8 The 60-day limitation with which they failed to comply can hardly be said to constitute a fundamental and inflexible part of the Act’s remedial scheme.9
Reiterating the old aphorism — “The failure to satisfy the conditions of the sovereign’s consent to be sued is fatal to the court’s jurisdiction” — the Government argues, however, that equitable principles may not be used to vary the literal terms of the sovereign’s consent. *366But neither reason nor authority is advanced to show why the approach taken in Glus and Burnett in determining whether a “substantive” limitation period is inflexible should not apply in suits against the Government. In fact, Burnett cited with approval10 Osbourne v. United States, 2 Cir., 164 F.2d 767 (1947), which involved claims against the Government under the Suits in Admiralty Act and against a private employer under the Jones Act. The court in Os-bourne tolled the “substantive” limitation periods of both statutes without discussing any possible difference between them. If equitable principles may be applied to extend the limitation period for a claim against the Government which would have to be satisfied from the federal treasury, as in Osbourne, no reason appears why such principles should not be applicable in suits against the United States where the claims are to be satisfied only from vested funds of the Yokohama Bank.
II
The Government’s opposition on the merits to the plea of estoppel is predicated on a rigid and mechanical approach to that doctrine. Estoppel is a “simple and wholly untechnical conception, perhaps the most powerful and flexible instrument to be found in any system of court jurisprudence.” Statement of Sir Frederick Pollock, quoted in Canada and Dominion Sugar Co. Ltd. v. Canadian National Steamships, Ltd., [1947] A.C. 46, 55. It should be neither rigidly circumscribed nor mechanically applied11 This does not mean courts are free to apply estoppel indiscriminately. The fundamental requirements — a representation, reliance, change of position, detriment— must be met.12 But once these elements are present, the novelty of a particular case should not deter courts from using the device to do justice.
The facts of this case reveal a combination of circumstances and procedures which have operated to bring about a potential injustice of substantial proportion. Appellants all filed timely claims. They could have obtained the post-war ratio for their deposits at any time at the Yokohama Bank in Japan. They did not. Rather, they held on to their certificates of deposit, hoping their own government, applying the beneficent provision of the Act, would treat them more fairly. But in 1958, after waiting 12 years to cash their deposit certificates, the Custodian informed them their recovery would be limited to the post-war ratio.
Many of the appellants undoubtedly could not understand the Custodian’s technical letter. But even if we assume they could, it seems certain the letter discouraged them from filing their certificates. The ratio offered rendered their small deposits almost completely worthless. A $500 creditor suddenly found he might be entitled to $10. Moreover, the letter pointed out- that “[p]ayment of your claim, however, will not be made immediately,” because it remained necessary to compile a Final Schedule (which took approximately three years). The letter then advised, however, that claimants could receive the same rate in Japan without going through as much trouble: “Under the circumstances, you may wish to utilize the funds in Japan rather than await settlement by this Office.”
The 1958 letter unquestionably contained an authorized representation of fact — that it was the Government’s position that payment should be made at the post-war rate. This representation was relied upon by appellants when they failed to file their certificates, knowing full well they could get the same rate at any time in Japan. The Government knew reliance might follow, and encour*367aged such reliance by suggesting Japan as an alternate, speedier source of funds. That only 1,817 of about 7,500 eligible claimants complied with the letter is strong evidence of its effect.
It turns out, however, that the Government’s position changed. When the Supreme Court granted certiorari in Aratani, the Government settled the cases on a basis completely at variance with its original position. The power of the Government to take its 1958 position, and to change its position in 1963, is incon-testible. But the exercise of this power cannot become a means, whether intentional or inadvertent*13 whereby innocent persons who acted in reliance upon the Government’s first representation should be denied the opportunity to recoup moneys which Congress wanted returned. The pattern of events — the letter which discouraged filing of certificates because of the position taken therein, the failure of the vast majority of claimants to file certificates, the subsequent change of position and settlement, the exclusion of appellants from the benefits of the change of position — could hardly have been better designed to secure exclusion of most claimants from the relief Congress afforded them, and from the relief to which the Office of Alien Property now apparently agrees they were always entitled.
We have here a remedial and humane piece of legislation designed to secure the equitable return of property to American citizens. The purposes of the limitation period have been satisfied, and nothing in the Act’s remedial scheme limits or precludes equitable extension of the limitation period. The Yokohama Bank account, with over $10,000,000 in cash, has more than enough to pay appellants the same rate paid the claimants in Abe. Under these circumstances, the Government should not be permitted to assert the statute of limitations as a bar to the suit. Appellants should be allowed to take advantage of the Government’s new position.
I respectfully dissent.

. Interstate Commerce Comm. v. Humboldt Steamship Co., 224 U.S. 474, 32 S.Ct. 556, 56 L.Ed. 849 (1912), is inapposite. In Humboldt, the I.C.C. “refused to proceed at all, though the law-required it to do so.” Id. at 485, 32 S.Ct. at 559. Here, the Custodian exercised jurisdiction over these claims and denied them on the merits. Congress acted within its power when it excluded these appellants, non-citizens at the time of seizure, from the relief the statute affords. Masami Sasaki v. Rogers, D.D.C., 185 F.Supp. 191 (1960).

. The Government’s statement implies that the settlement was for 49% of the amount claimed. Actually, 49% is the amount paid over to the claimants. — i.e., the total award less 20% for attorneys’ fees. Brief for Respondent, p. 7.

. Stockstrom v. Commissioner of Internal Revenue, 88 U.S.App.D.C. 286, 190 F.2d 283, 30 A.L.R.2d 443 (1951); Vestal v. Commissioner of Internal Revenue, 80 U.S.App.D.C. 264, 152 F.2d 132 (1945). Berger, Estoppel Against the Government, 21 U.Chi.L.Rev. 680, 687-688 (1954):
“However the case may be with respect-to ‘unauthorized’ conduct, estop-pel clearly may be based upon ‘authorized’ conduct. From the Supreme Court’s oft-repeated formulation of the immunity from estoppel in terms of administrative action that ‘the law does not sanction or permit,’ it may bo inferred that government is bound by actions within the scope of the agent’s authority. A steadily growing number of federal courts have properly so held, for the sole tenable argument for the immunity derives from separation of powers considerations which have no play where administrative action is au-thorised by Congress. In such case the government should be and is es-topped.” (Emphasis in original.)
In holding that estoppel cannot be applied against the Government, the majority ignores these authorities. The statement in Legerlotz v. Rogers, 105 U.S.App.D.C. 256, 258 n. 5, 266 F.2d 457, 459 n. 5 (1959), relied on by the majority, that estoppel does not lie against the Government, is dictum and arose in a context which clearly precluded applica*364tion of the doctrine. The Attorney General had sent plaintiff a Notice of Intention to return a certain sum seized during the war, but later decided to retain a part of the sum involved. , Plaintiff, allegedly in reliance upon the Notice, failed to bring suit within the two years prescribed by statute. But the court pointed out that the statute specifically provided that a Notice of Intention conferred no right of action to compel the return of property; the provision’s purpose was to leave the Attorney General with the power freely to change his mind.

. The Supreme Court held, in Markham v. Cabell, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 (1945), that creditors or allies of enemies whose property had been seized by the Custodian during World War II may maintain suits against the Custodian on their debt claims under the Trading with the Enemy Act § 9(a), although that section appeared to apply only to World War I seizures. This resulted in a “first come, first served” rule —a race of creditors which exhausted properties without equitable distribution —and in serious interference with the use of the property to the best interests of the United States. Congress acted promptly. Within one year, § 34 was passed at the Custodian’s urgent recommendation, providing for the equitable distribution of vested property by disallowing independent suits and by setting up a procedure whereby all claims could be considered and disposed of together. H.R.Rep. No. 2398, 79th Cong., 2d Sess. (1946).

. “The Custodian has emphasized to the committee that he is anxious to satisfy the proper claims of creditors and the committee concur in the view that there exists a strong moral obligation to satisfy them inasmuch as, but for the vesting of their debtors’ property, they would *365presumably have been able to pursue ordinary remedies against the debtors.” H.R.Rep. No. 2398, supra Note 4, at p. 10.

. The FELA provision, 45 U.S.C. § 56, if anything, is more absolute: “No action shall be maintained under this chapter unless commenced within three years from the day the cause of action accrued.”

. As pointed out supra, Note 4, passage of the present § 34 of the Act was generated by the Supreme Court ruling that creditors could sue, necessarily on a “first come, first served” basis, under § 9(a). The committee report makes clear that § 34 (i) was passed to preclude § 9(a) suits:
“Section 35(i) [now 34(i)] is generally procedural in nature. It provides that the debt claim provisions of the bill shall constitute the sole relief of creditors, except for their right to sue the original debtor or any other person liable. It is expressly provided that debt claim suits heretofore filed under section 9(a) shall not be continued and only suits to review the Custodian’s determination under the bill are maintainable with respect to debt claims. This is believed necessary to the effective operation of the debt claim provisions of the bill. * * * ” H.R.Rep. No. 2398, supra Note 4, at p. 15.

. It is upon non-compliance with the similarly fundamental requirement of § 33 of the Act that the cases cited by the Government are based. See, e.g., Brownell v. Morizo Nakashima, 9 Cir., 243 F.2d 787, cert. denied, 355 U.S. 872, 78 S.Ct. 117, 2 L.Ed.2d 77 (1947).

. The suppletive nature of the requirement makes it analogous to the 60-day reporting requirement in N. V. Philips’ Gloei-lampenfabrieken v. Atomic Energy Comm., 114 U.S.App.D.C. 400, 316 F.2d 401 (1963). There, petitioners owned certain foreign patents which were divulged to the United States Government in connec- . tion with Project Manhattan and were widely used. The Patent Compensation Board rejected petitioners’ claim for “just compensation” on the ground that petitioners had failed to file a report describing the processes of their inventions within 60 days of the passage of the statute conferring a right to compensation. We looked to the purpose of the requirement and found, not a mechanical reporting process, but a means for assuring disclosure. It was conceded that the A.E.C. had the relevant information. We concluded: “Under the circumstances of this case, the Commission should not be allowed to seize upon this technicality to avoid a responsibility which the Congress recognized.” 114 U.S.App.D.C. at 408, 316 F.2d at 409. Since in these cases the Custodian knew of appellants’ claims and could include them in his computations in equitably distributing the Yokohama property, the failure to file for review in time did not interfere with the basic purpose of the Act.

. 380 U.S. at 427, 85 S.Ct. 1050, 13 L.Ed.2d 941.

. Courts have refused to follow rigid definitions of the doctrine. See generally Berger, op.eit.supra Note 3; Dawson, Estoppel and Statutes of Limitation, 34 Mich.L.Rev. 1 (1935); Lynn & Gerson, Quasi-Estoppel Applied Against the United States in Federal Tax Controversies, 19 Tax L.Rev. 487 (1964).

. See 3 Pomeroy, Equity Jurisprudence § 805 (5th ed. 1941).

. See Peters v. St. Paul Fire & Marine Insurance Company, S.D.N.Y., 213 F.Supp. 441, 442 (1963):
“Where one party induces another to delay in bringing suit so that an applicable period of limitation expires, he may be estopped from asserting such expiration in defense even though the inducement to delay was done innocently or unintentionally. * * * ”
See also Romano v. Metropolitan Life Ins. Co., 271 N.Y. 288, 2 N.E.2d 661, 105 A.L.R. 989 (1936).