United States v. Wissahickon Tool Works

• Decision Date: 23 December 1952
• Docket Number: No. 39-42,Dockets 22415-22418.,39-42
• Citation: 200 F.2d 936
• Parties: UNITED STATES v. WISSAHICKON TOOL WORKS, Inc. UNITED STATES v. ROXBORO STEEL CO. UNITED STATES v. WILKES BARRE CARRIAGE CO., Inc. UNITED STATES v. WEST PITTSTON IRON WORKS, Inc.
• Court: U.S. Court of Appeals — Second Circuit

200 F.2d 936 (1952)

UNITED STATES v. WISSAHICKON TOOL WORKS, Inc.

UNITED STATES v. ROXBORO STEEL CO.

UNITED STATES v. WILKES BARRE CARRIAGE CO., Inc.

UNITED STATES v. WEST PITTSTON IRON WORKS, Inc.

Nos. 39-42, Dockets 22415-22418.

United States Court of Appeals Second Circuit.

Argued November 14, 1952.

Decided December 23, 1952.

Victor R. Wolder, New York City, for defendants-appellants.

Julian R. Wilheim, Atty., Dept. of Justice, Washington, D. C. (Holmes Baldridge, Asst. Atty. Gen., Saul R. Gamer, Atty., Dept. of Justice, Washington, D. C. and Myles J. Lane, U. S. Atty., and Harold J. Raby, Asst. U. S. Atty., both of New York City, on the brief), for plaintiff-appellee.

Before AUGUSTUS N. HAND, CHASE, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Four actions brought by the United States pursuant to the Renegotiation Act, § 403 of the Sixth Supplemental National Defense Appropriation Act of 1942, as amended, 50 U.S.C.Appendix § 1191, have been consolidated for purposes of this appeal. In these suits plaintiff seeks to recover allegedly excessive profits made under Government contracts by the four defendants, Wissahickon Tool Works, Inc., Roxboro Steel Company, Wilkes Barre Carriage Co., Inc., and West Pittston Iron Works, Inc., during their fiscal year ending July 31, 1943. After issue was joined, plaintiff moved to strike the defenses, offsets, and counterclaims set up in the answers and for judgment on the pleadings. Three of the defendants moved to have James W. Johnson, then Collector of Internal Revenue for the Third District, made an additional party defendant as to some of the counterclaims. The district court denied the defense motions and plaintiff's motion for judgment on the pleadings, but ordered most of the defenses and offsets and all of the counterclaims struck from the answers. D.C.S.D.N.Y., 84 F. Supp. 896. Plaintiff subsequently moved for summary judgment against all four defendants, who, in turn, submitted various cross-motions. These motions were heard by another judge, who denied defendants' motions and granted summary judgment for plaintiff in an opinion filed on April 10, 1951, D.C.S.D.N.Y., 99 F.Supp. 331. On January 23, 1952, plaintiff noticed for settlement orders and judgments based on this decision; but on the settlement date, January 25, it was met with an order to show cause on February 1 on defendants' motions for leave to serve supplemental answers and to reargue the motions originally heard and granted the previous year. The judge on February 1, 1952, having heard arguments, denied the motions and signed in each case the "Order and Judgment" as submitted by the plaintiff, embodying the mandate of the opinion of April 10, 1951, as well as the denial of the further motions. Defendants are appealing from these judgments and also complain of the adverse earlier rulings.¹

We may first address ourselves to the question whether or not the appeals taken on March 31, 1952, were timely. They were of course within the proper time, Fed.Rules Civ.Proc. rule 73(a), as appeals from the orders of February 1, 1952, but not from those of April 10, 1951. But the earlier orders were clearly the final judgments. No more explicit mandate for a plaintiff's judgment than that granting a summary judgment in the amount claimed can be conceived; and notation of the grant in the civil docket on that date became the judgment under the provisions of F.R. 58. Counsel and the court officials were on further notice of the correct practice under this rule by reason of a supplementing local rule — Rule 10 of the General Rules of the district court — providing that the judge's memorandum determining a motion "shall constitute the order." The clerk should then have prepared and entered in his civil judgment or order book, F.R. 79(b), a simple form of judgment as directed in F.R. 54(a), eschewing the lengthy recitals familiar in state practice. But failure to do so or to note it in some other place or book would not change the result, cf. F.R. 79(a); nor would the date be changed by forms of judgment later submitted by counsel, even if these are signed by the judge. Leonard v. Prince Line, 2 Cir., 157 F.2d 987, 989; Murphy v. Lehigh Valley R. Co., 2 Cir., 158 F.2d 481, 485; Binder v. Commercial Travelers Mut. Acc. Ass'n of America, 2 Cir., 165 F.2d 896, 901; Markert v. Swift & Co., 2 Cir., 173 F.2d 517, 519, n. 1. The objective of this carefully delineated practice is obviously to enable the court to keep control of its own judgment and to avoid such purposeless delay as this case discloses. See the Advisory Committee's Note to the amendment to F.R. 58 stating that the change "makes it clear that the clerk shall enter the judgment forthwith in the situations specified without awaiting the filing of a formal judgment approved by the court."

Hence the court should not have accepted plaintiff's forms of judgment (which, incidentally, were more complicated than F. R. 54a contemplates); nor should it have accepted motions for reargument at that late date in 1952, cf. F.R. 59. Defendants, however, could have made motions for relief from the judgments on any of the grounds stated in F.R. 60(b). In the interest of justice we might treat defendants' motions as in effect raising the issues available under the latter rule, and the appeals as from their denials, which are appealable orders. Cromelin v. Markwalter, 5 Cir., 181 F.2d 948; Weilbacher v. J. H. Winchester & Co., 2 Cir., 197 F.2d 303, 305. None of the grounds specified in the rule, however, seem apposite to the contentions stressed in the motions; and presumably we should treat the appeals as so limited and affirm accordingly. But since all the parties and the court have participated in this irregular procedure, and the merits were re-examined on the latest hearing, we have decided, not without some hesitation, to consider all questions presented and argued by the parties.

The first questions raised concern the court's action in granting in part plaintiff's motions to strike portions of the answers. D.C.S.D.N.Y., 84 F.Supp. 896. None of the objections here raised are well founded. Since the complaints, identical as to each defendant except for the amounts, adequately met the requirements of F.R. 8(a), the court did not err in striking the defenses which challenged their adequacy. The court also properly struck those offsets and counterclaims, based on defendants' tax refund claims amounting to more than $10,000, where the taxes had been paid to a collector still in office. Such claims are beyond the jurisdiction of the district court, 28 U.S.C. § 1346, and jurisdictional limitations based on sovereign immunity apply equally to counterclaims against the Government. See, e. g., Nassau Smelting & Refining Works v. United States, 266 U.S. 101, 45 S.Ct. 25, 69 L.Ed. 190. The same rule prevailed in March, 1949, when the counterclaims were interposed; we cannot agree with defendants' contention that the form of § 1346 in effect from its enactment in 1948 to its amendment in 1949 lacked the $10,000 maximum limit.² Consequently the court had no alternative but to deny defendants' motion under F.R. 13(h) to join James W. Johnson, the Collector of Internal Revenue to whom the taxes had been paid, as a party defendant with respect to these counterclaims.

Finally, defendants object to the striking of their allegations that they were denied due process of law by the arbitrary and capricious action of the War Department Price Adjustment Board and the War Contracts Price Adjustment Board, the two bodies which conducted the renegotiation proceedings here involved. But the district court lacked the power to consider these contentions. The Renegotiation Act vests exclusive jurisdiction in the Tax Court to review administrative determinations of the amount of a contractor's excessive profits liability. Sec. 403(e) (1). Defendants did not pursue this mode of relief. The Act specifically provides that in such a case the Board orders shall be final and not subject to review by any court. Sec. 403(c) (1). Defendants' objections to the actions of the Boards involve determinations of the amount of liability and thus fall squarely within the orbit of exclusive Tax Court review. See Lichter v. United States, 334 U.S. 742, 792, 68 S.Ct. 1294, 92 L.Ed. 1694. Hence there was no error in the orders precluding defendants from asserting this defense in the district court.

On defendants' appeals from the grants of summary judgment the principal issues concern the effect of the limitation provisions in the Renegotiation Act and the propriety of the court's refusal to permit the offsets over which it had jurisdiction. Defendants also challenge the court's allowance of interest at the rate of six per cent from April 18, 1947. And in addition to certain other contentions noted below, they urge that even if the rulings of law were not erroneous, there still remained questions of fact which required denial of plaintiff's motions for summary judgment.

The Renegotiation Act sets time limits both upon the commencement and completion of administrative proceedings to determine excessive profits. Sec. 403(c) (3) provides that all liability for such profits shall be discharged if administrative action is not begun within one year after either the close of the contractor's relevant fiscal year or the date upon which he filed his Standard Form of Contractors Report, whichever is later. The same section also discharges liability if the amount of excessive profits is not determined within one year after renegotiation proceedings are begun unless the time has been extended by mutual agreement. The complaints in the present actions show that plaintiff has met these limitation requirements, and neither defendants' pleading nor their evidence raise a genuine question of fact as to this. On July 11, 1944, less than a year after defendants' relevant fiscal year had ended, they were sent registered...