Lichter v. United States
| Decision Date | 16 June 1947 |
| Docket Number | No. 10312.,10312. |
| Citation | 160 F.2d 329 |
| Parties | LICHTER et al. v. UNITED STATES. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Paul W. Steer, of Cincinnati, Ohio (Paul W. Steer and Steer, Strauss & Adair, all of Cincinnati, Ohio, on the brief), for appellants.
Ellis Lyons, of Washington, D. C. (John F. Sonnett, of New York City, Ray J. O'Donnell, of Columbus, Ohio, and William J. Dammarell, of Cincinnati, Ohio, and J. Francis Hayden and Ellis Lyons, both of Washington, D. C., on the brief), for appellee.
Before HICKS, SIMONS and MILLER, Circuit Judges.
Writ of Certiorari Granted June 16, 1947. See 67 S.Ct. 1741.
The questions involved in this appeal relate to the coverage and the constitutional validity of the Renegotiation Act of April 28, 1942, 56 Stat. 226, 245, as amended by the Revenue Act of 1943, the Act of February 25, 1944, 58 Stat. 21, 78, 50 U.S.C.A. Appendix, § 1191. The appeal is from a summary judgment entered in favor of the government against the appellants for the recovery of excessive profits made under subcontracts on construction work done for the War Department.
The appellants reside in Cincinnati and their partnership will be referred to as Southern. In 1942 Southern was a subcontractor in nine subcontracts awarded to it after competitive bidding, for the construction of buildings and facilities. The prime contracts likewise resulted from such bidding. On October 20, 1944, Robert P. Patterson, then Undersecretary of War, issued an order pursuant to the Renegotiation Act, determining that Southern had realized, during 1942, excessive profits of $70,000 on its subcontracts, and directed it to pay into the Treasury the amount of such excessive profits less a tax credit of $42,980.61. Southern filed no petition with the Tax Court for a redetermination of the Undersecretary's order, and the time for filing such petition has long since expired. Of the nine contracts involved, four were executed prior to April 28, 1942, the date of the original Renegotiation Act, and the remaining five were executed prior to October 21, 1942 the date of the initial amendment to the Renegotiation Act. Of the nine contracts involved, only two were in an amount in excess of $100,000 and were executed prior to April 28, 1942. The remaining seven were for amounts less than $100,000. Southern having failed to comply with an order of the Undersecretary of War to repay the determined excessive profits to the government, the United States brought suit for recovery. Southern defended on the ground that all of the subcontracts were specifically exempt from renegotiation by the terms of the Act, as amended; that in any event its contracts executed prior to April 28, 1942 and those less in principal amount than $100,000 were not renegotiable; and finally, that the Renegotiation Act is unconstitutional.
The district court held the Renegotiation Act as originally enacted, and as subsequently amended, to be a constitutional exercise of the war powers of the Congress, that it applied to excessive profits realized under contracts entered into prior to April 28, 1942, and as so applied was likewise constitutional; that the failure of the appellants to seek a review de novo in the Tax Court of the United States, of the Undersecretary of War's determination of excessive profits as provided by § 403 (e) (2) of the Renegotiation Act, foreclosed the appellants from asserting their defenses, other than the constitutional invalidity of the Act, in the District Court of the United States.
Southern's contention that the district court had jurisdiction to consider all of its defenses, derives from the chronological sequence of the Act and its amendments, and rests specifically upon the phrasing of the amendatory provisions of §§ 403(e)(2) and 403(c) of the Revenue Act of 1943. It points out that prior to that amendment the rights of any person involved in renegotiation procedures were the same as in reference to other statutes, so that the validity of any claim or defense could be determined in a judicial proceeding. This is made clear, it says, by the fact that the original bill before the Congress contained a provision prohibiting a contractor from going into the courts, which was stricken before its passage. It also points out that the requirement, if it be a requirement, that a contractor submit his claims to the Tax Court of the United States, first appeared in the Revenue Act of 1943, enacted February 25, 1944, and that its contracts, all being part of its 1942 business, were not thereby affected. A proper appraisal of this contention requires consideration of the terms of the amendment. Section 403(e)(2) provides: "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, which is not embodied in an agreement with the contractor or subcontractor, may, within ninety days * * * after the date of the enactment of the Revenue Act of 1943, file a petition with the Tax Court of the United States for a redetermination thereof, and any such contractor or subcontractor aggrieved by a determination of the Secretary made on or after the date of the enactment of the Revenue Act of 1943, with respect to any such fiscal year, as to the existence of excessive profits, which is not embodied in an agreement with the contractor or subcontractor, may, within ninety days * * * after the date of such determination, file a petition with The Tax Court of the United States for a redetermination thereof."
It urges that this language is permissive and not mandatory, and that this is made clear by contrast with the phrasing of § 403(c), which is as follows:
It urges also that by § 403(c) (6) the application of subsection (c) is limited to amounts received or accrued for fiscal years ending after June 30, 1943, the provision being in the following language: "This subsection shall be applicable to all contracts and subcontracts, to the extent of amounts received or accrued thereunder in any fiscal year ending after June 30, 1943, * * *".
From this comparison of sections it is argued that, in the absence of the filing of a petition with...
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Lichter v. United States Pownall v. United States Alexander Wool Combing Co v. United States 95
...of the excessive profits, if any, were barred from making their other attacks on the Secretary's determination of such excessive profits. 160 F.2d 329. Because of the basic significance of the constitutional questions involved we granted certiorari. 331 U.S. 802, 67 S.Ct. 1741, 91 L.Ed. No.......
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Monolith Portland Mid. Co. v. Reconstruction F. Corp.
...the three circuits referred to in the Lichter case, supra, held the Renegotiation Act constitutional. The Sixth Circuit in Lichter v. U. S., 1947, 160 F.2d 329, 332, rejected a contention based on the Fifth Amendment. The Ninth Circuit in Pownall v. U. S., 1947, 159 F.2d 73, relied on its p......
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United States v. Howell Electric Motors Co.
...& Diesel Equipment Corp. v. Hirsch, 1947, 331 U.S. 752, 67 S.Ct. 1493, 91 L.Ed. 1796, and in this very circuit Lichter v. United States, 6 Cir., 160 F. 2d 329, 331, a case, where as here, the government brought suit to recover excesssive profits after the contractor had received payment. Th......
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Howell Electric Motors Co. v. United States, 10736.
...fully completed contracts. The broad principles of its constitutionality have been stated previously by this court in Lichter v. United States, 6 Cir., 160 F.2d 329, which, together with two other renegotiation cases, was affirmed by the Supreme Court in 334 U.S. 742, 68 S.Ct. 1294. Cf. Lin......