Eastport Steamship Corporation v. United States

• Decision Date: 17 February 1967
• Docket Number: No. 74-55.,74-55.
• Citation: 178 Ct. Cl. 599,372 F.2d 1002
• Parties: EASTPORT STEAMSHIP CORPORATION v. The UNITED STATES.
• Court: U.S. Claims Court

178 Ct. Cl. 599, 372 F.2d 1002 (1967)

EASTPORT STEAMSHIP CORPORATION v. The UNITED STATES.

No. 74-55.

United States Court of Claims.

February 17, 1967.

COPYRIGHT MATERIAL OMITTED

T. S. L. Perlman, Washington, D. C., for plaintiff, J. Franklin Fort, Washington, D. C., attorney of record. Michael Joseph, Washington, D. C., of counsel.

Anthony W. Gross, Washington, D. C., with whom was Asst. Atty. Gen., Barefoot Sanders, for defendant.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON and NICHOLS, Judges.

OPINION

DAVIS, Judge.^*

In 1946, in the train of World War II, the United States was offered some former German merchant vessels as part of reparations. Despite some initial misgivings that the Maritime Commission already had enough American-built surplus vessels to dispose of, the Commission ultimately agreed with the Department of State to accept thirteen of these ex-German ships on the understanding that they would be used by American operators under the American flag and would not be sold on the world market. Eleven vessels were offered for sale, including the Empire Roding (which came to plaintiff and was renamed the Eastport). The Commission's invitation for bids, as modified, provided that the purchasers would be barred from selling the ships or operating them prior to documentation under the American flag. Plaintiff's president specifically inquired whether there would be any restriction on a later sale foreign. The Commission's reply was that any application for such a sale would have to be considered under Sections 9 and 37 of the Shipping Act¹ and that no prior assurance could be given.

Five bids were received for the Empire Roding. The high bidder (offering $425,000) conditioned its bid on the Commission's agreeing to a transfer to the Danish flag immediately after American documentation. This qualification was unacceptable and the bid was rejected. The next highest bidder, which did not wish to accept more than two of the four vessels on which it bid, was allocated two other ships and its proffer of $190,300 for the Empire Roding was set aside. Plaintiff then became the higher offeror and received the vessel in April 1947 for $130,750 in cash.

At considerable cost the ship was altered and converted to meet the requirements of American documentation. She was then put to sea and pursued a disastrous career until plaintiff finally gave up in June 1949 and placed her in lay-up awaiting sale. From May 1948, when it realized she was a "lemon", plaintiff made strenuous but unsuccessful efforts to sell her domestically. In June 1948 the company turned to the foreign market.

Sale alien, plaintiff knew, would require the Commission's permission, and preliminary conferences were held with the agency's staff to sound out the possibilities. Other purchasers of the ex-German vessels were having comparable difficulties, and the problem of this group of ships had been mooted before the Commission. In the first part of 1948 it had denied some applications to transfer formerly German ships to Panamanian registry and flag without change in American ownership. In October 1948, the Commission rejected a similar recommendation of its staff as to three other such ships. On February 18, 1949, at the request of some of the owners, the Commission held an open hearing on the subject of whether to permit the foreign sale of this ex-German group.

One week before this hearing (i. e. on February 11, 1949), plaintiff concluded a contract for the sale of the Eastport to a Danish buyer for $560,000, conditioned upon the seller's obtaining Commission approval within three months. The application for approval was filed on February 24, 1949. When the three-month period neared its close without Commission action, plaintiff made efforts to have its request disposed of within the time limit, and also obtained, as a last resort, a two-week extension from the Danish purchaser (from May 11 to May 25, 1949). The extended deadline passed without affirmative action by the Commission² and the Danish firm canceled the contract.

Months later, at the end of December 1949, after a sharp fall in the world market price, plaintiff contracted to sell the Eastport to an Israeli corporation for the lower price of $375,000 (and also subject to Commission approval of the foreign transfer). In March 1950 the Commission approved this application upon payment by plaintiff of "the sum of $10,000 as consideration for the release of the * * * Eastport from United States flag operation." This condition was imposed under a policy, first formally adopted by the Commission in June 1949, of requiring owners of ex-German vessels to pay a monetary sum (differing with the individual ship) for the release of the vessels from the requirement of restricted operation.

In a series of cases this court has held that monetary conditions, such as these, for permission to transfer a vessel are unlawful and beyond the Commission's authority under Section 9 of the Shipping Act. Clapp v. United States, 117 F.Supp. 576, 127 Ct.Cl. 505 (1954), cert. denied, 348 U.S. 834, 75 S.Ct. 55, 99 L.Ed. 658; Suwannee S.S. v. United States, 279 F.2d 874, 150 Ct.Cl. 331 (1960); Seatrade Corp. v. United States, 285 F.2d 448, 152 Ct.Cl. 356 (1961). Those claimants were allowed to recover the amounts illegally exacted.

Plaintiff's petition in this court sought (in count II) return of the $10,000 it was required to pay upon the approval of its sale to the Israeli company. In count I plaintiff sought damages for the Commission's earlier failure to approve the potential sale to the Danish buyer. After the decisions in the three cases referred to above, plaintiff moved for summary judgment.³ On June 6, 1962, we granted the motion as to count II, gave judgment for $10,000 on the authority of the prior decisions, but denied the motion as to count I, returning the case to the trial commissioner for further proceedings. Eastport S.S. v. United States, 157 Ct.Cl. 802. We are now concerned, after a trial,⁴ with the claim for damages, as set forth in count I.

The gist of that grievance is that in the spring of 1949 the Commission deliberately withheld its consent to the foreign sale and transfer of the Eastport to the Danish buyer while the agency was secretly formulating an illegal policy of selling such approvals for money, and that this conduct gives rise to an action for damages, cognizable in this court, for loss of the Danish contract which expired for lack of Commission consent in May 1949.

The trial commissioner examined at length the factual underpinning of this claim and made several findings favorable to plaintiff (although he ultimately decided against recovery). These findings are vigorously contested by defendant all along the line. We do not determine these factual issues because we believe that, even if the facts are assumed for present purposes to be with plaintiff, it does not state a cause of action upon which this court can grant any further relief.

I

Section 1491 of Title 28 of the United States Code allows the Court of Claims to entertain claims against the United States "founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort". But it is not every claim involving or invoking the Constitution, a federal statute, or a regulation which is cognizable here. The claim must, of course, be for money.⁵ Within that sphere, the non-contractual claims we consider under Section 1491 can be divided into two somewhat overlapping classes — those in which the plaintiff has paid money over to the Government, directly or in effect, and seeks return of all or part of that sum; and those demands in which money has not been paid but the plaintiff asserts that he is nevertheless entitled to a payment from the treasury. In the first group (where money or property has been paid or taken), the claim must assert that the value sued for was improperly paid, exacted, or taken from the claimant in contravention of the Constitution, a statute, or a regulation. In the second group, where no such payment has been made, the allegation must be that the particular provision of law relied upon grants the claimant, expressly or by implication, a right to be paid a certain sum. See South Puerto Rico Sugar Co. Trading Corp. v. United States, 334 F.2d 622, 626-627, 167 Ct.Cl. 236, 244-245 (1964), cert. denied, 379 U.S. 964, 85 S.Ct. 654, 13 L.Ed.2d 558 (1965).

In the former class fall, among many others, tax refund suits and the claims by purchasers of ex-German vessels for the sums exacted by the Maritime Commission which were returned in Clapp v. United States, supra, and in the first decision in this case (Eastport S.S. v. United States, supra).⁶ We have referred to these cases as those in which "the Government has the citizen's money in its pocket" and the claim is "to recover an illegal exaction made by officials of the Government, which exaction is based upon a power supposedly conferred by a statute" (Clapp v. United States, supra, 117 F.Supp. at 580, 127 Ct.Cl. at 512, 513) (see, also, Pan American World Airways, Inc. v. United States, supra, 122 F.Supp. at 683, 129 Ct.Cl. at 55); and we have held that "suit can be brought in this court to recover such exactions said to have been illegally imposed by federal officials (except where Congress has expressly placed jurisdiction elsewhere)." South Puerto Rico Sugar Trading Corp. v. United States, supra, 334 F.2d at 626, 167 Ct.Cl. at 244.

The second category includes the varied litigations in which we are urged to hold that some specific provision of law embodies a command to the United States to pay the plaintiff some money, upon proof of conditions which he is said to meet. Familiar examples are inverse eminent domain by a taking without...