Aycock-Lindsey Corporation v. United States

• Decision Date: 23 December 1948
• Docket Number: No. 12353.,12353.
• Citation: 171 F.2d 518
• Parties: AYCOCK-LINDSEY CORPORATION v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

171 F.2d 518 (1948)

AYCOCK-LINDSEY CORPORATION v. UNITED STATES.

No. 12353.

United States Court of Appeals Fifth Circuit.

December 23, 1948.

Lucien H. Boggs and Delbridge L. Gibbs, both of Jacksonville, Fla., for appellant.

Damon G. Yerkes, Asst. U. S. Atty., of Jacksonville, Fla., and Isidor Lazarus, Atty., Dept. of Justice, of Washington, D. C., for appellee.

Before HUTCHESON, SIBLEY and WALLER, Circuit Judges.

WALLER, Circuit Judge.

Two questions are involved in this case: (1) whether or not the District Court has jurisdiction under the Tucker Act¹ of this action by a naval stores producer to recover subsidy payments under the Federal Soil Conservation and Domestic Allotment Act on the theory that Appellant's claim arose under a law of Congress and also under an implied contract which it performed and which entitled it to the payment of a subsidy under the regulations of the Department of Agriculture governing the naval stores production and conservation program of such Department; (2) whether or not there was a determination by the Secretary of Agriculture of the facts in this case that was conclusive so as to preclude judicial review of the law applicable to such facts. If Question No. 1 were to be answered in the affirmative and No. 2 were to be answered in the negative, there would also arise a third question as to whether Plaintiff and its wholly-owned subsidiary should be deemed to be as a single corporation or entity in applying the limitation of $10,000 payable to any one person under the Act.² The lower Court, believing that it was without jurisdiction, did not undertake to pass upon the third question and we will, therefore, omit it from this discussion.

Prior to the 1939 naval stores producing season the appellant was carrying on naval stores operations in Dixie and Lafayette Counties, Florida. Its operations in Dixie County were under leases of timber executed to it by Brooks-Scanlon Corporation and by Putnam Lumber Company, which leases contained specified minimum requirements for working the timber for naval stores production. By reason of such requirements, appellant was unable to comply with the program for the curtailment of naval stores production promulgated by the Department of Agriculture under the Soil Conservation and Domestic Allotment Act, 16 U.S.C.A. § 590a et seq.³

Appellant had, also, a substantial naval stores operation in Lafayette County on timber which it owned outright, or on which it held leases containing no restrictive requirements such as would prevent the operation from coming under the provisions of the Soil Conservation and Domestic Allotment Act. So in order to bring the Lafayette County timber within that program, a separate corporation, Mayo Rosin Company, was organized in 1938 to take over the Lafayette County operations. This procedure met with approval of the officer in charge of the United States Conservation Program as revealed by a letter to appellant dated November 15, 1938. Pursuant to this arrangement the Mayo Rosin Company, during the years 1939-1943, inclusive, carried on this operation in conformity with the program. It also received the appropriate subsidies therefor except for the years 1942 and 1943.

The program prior to 1942 was one designed to curtail the production of naval stores, but the policy and program were changed and in 1942 and 1943 subsidies were paid for increased, rather than curtailed, production. Under the program for increased production the covenants in the appellant's leases on timber in Dixie County no longer stood in the way, so that the appellant was then able to come within, and comply with, the latter program. Accordingly it thereupon fulfilled all requirements of the Department and became entitled — according to its contentions — to the subsidy payments on its operations in Dixie County. These subsidy payments were made to it, as well as to the Mayo Rosin Company, for the year 1942. In 1943 the two companies again complied with the requirements for the payment of subsidies for that year, but before payment was made for 1943, the Solicitor for the Department of Agriculture rendered an opinion to the effect that appellant and its wholly-owned subsidiary, Mayo Rosin Company, should be treated as a single enterprise or unit.⁴ The Regional Fiscal Agent of the Forest Service advised the appellant, on July 19, 1944, of the opinion of the Solicitor, and that pursuant thereto the subsidy of the two companies would have an over-all limitation of $10,000, and that the excess paid in the year 1942 would be deducted from the subsidies that otherwise would have been payable in the year 1943. By reason of this reversal of position the appellant and its subsidiary, Mayo Rosin Company, which were entitled under the prior arrangement, to $7,220.10 and $7,708.91, respectively, had their claims reduced to $572.33 and $1,431.54, respectively. The appellant has brought this suit under the Tucker Act, Title 28 U.S.C.A. § 41(20), and under the Soil Conservation and Domestic Allotment Act, Title 16 U.S. C.A. § 590a et seq., to recover the difference between the amount payable to both corporations as separate entities under the program as applied prior to 1943.

In sustaining the defendant's motion to dismiss the complaint the lower Court held: (1) that the Soil Conservation and Domestic Allotment Act did not expressly, or by implication, waive the immunity of the United States to suit; (2) Plaintiff's compliance with the Act did not constitute a contract, express or implied, which obligated the United States to pay the subsidy within the purview of the Tucker Act; (3) that under Section 590n of the Act and Section 1385 of Title 7 U.S.C.A., Agricultural Adjustment Act, the Secretary of Agriculture was empowered to determine with finality the facts constituting the basis for payment under the Act, and that such an official determination was not reviewable; (4) that the Secretary had made his determination in this case; and (5) that plaintiff had alleged that the administrative remedies thus provided by the Act had been exhausted.

The first and the most difficult question involved in the case is whether jurisdiction is accorded to the appellant to sue the United States under the Tucker Act.

The United States insists that the statute, regulation, and the arrangement to pay a subsidy to naval stores producers who voluntarily complied with either the curtailment program or the increased production program constituted no contract, express or implied, and that the subsidy was a mere gratuity, dependent upon Congressional appropriations, the number of participants, the extent of compliance, the determination by the Secretary, and was so indefinite in amount that no enforceable claim in favor of the complying operator was established. It further contends that the claim was not founded upon any law of Congress or regulation of an executive department. We do not understand the contention of the appellee to be that the making of these subsidy payments did not have Congressional authority or sanction, but that the Act in question under which the Secretary was authorized to assist in voluntary action calculated to curtail production, created no enforceable claim or right of action against the Government. The Tucker Act does not provide that a statute of Congress upon which a claim is founded shall also provide that suit may be maintained against the United States for claims arising under such statute. The authority for a suit is found in the general terms of the Tucker Act and need not be reiterated in every enactment of Congress upon which a claim against the United States could be "founded".

Moreover, it definitely appears that the claim is also based upon a regulation of an executive department of the Federal Government and, therefore, comes within another clause of the Tucker Act. The appellee does not contend that the Secretary of Agriculture was not authorized to inaugurate and maintain either the curtailment, or the increased-production, program. When, therefore, the Secretary of Agriculture published bulletins and promulgated rules providing for the payment of subsidies to those naval stores producers who accepted the offer by voluntarily coming under, and complying with, the Act, there was revealed the traditional essentials of a contract, namely, an offer and an acceptance, to the extent that we should hesitate to hold that there was not at least an implied contract to pay subsidies, in some amount, and that a claim thereunder would also be founded upon a regulation of an executive department. In the payment of such amounts there must, of course, be equality of treatment among those similarly situated. If the Secretary of Agriculture pays to A a subsidy of $165 for complying with the program as to 11,000 turpentine faces, is there not some sort of an implied obligation that the Secretary of Agriculture should also pay to B $165 for complying with the program as to his 11,000 turpentine faces, unless it appears that these parties are AB instead of A and B?

In view of the numerous...