Blanchard Mach. Co. v. Reconstruction Finance Corp., 9925.

• Decision Date: 17 October 1949
• Docket Number: No. 9925.,9925.
• Parties: BLANCHARD MACH. CO. v. RECONSTRUCTION FINANCE CORPORATION PRICE ADJUSTMENT BOARD.
• Court: U.S. Court of Appeals — District of Columbia Circuit

85 US App. DC 361, 177 F.2d 727 (1949)

BLANCHARD MACH. CO. v. RECONSTRUCTION FINANCE CORPORATION PRICE ADJUSTMENT BOARD.

No. 9925.

United States Court of Appeals District of Columbia Circuit.

Argued May 20, 1949.

Decided October 17, 1949.

Mr. Frank B. Wallis and Mr. Allan H. W. Higgins, Boston, Mass., with whom Messrs. Goodwin, Proctor & Hoar, and Mr. Spencer M. Beresford, Boston, Mass., were on briefs for petitioner.

Mr. Newell A. Clapp, Attorney, Department of Justice, Washington, D. C., with whom Mr. H. G. Morison, Assistant Attorney General, and Messrs. Paul A. Sweeney, Washington, D.C., Frederick N. Curley, Arlington, Va., and Oscar H. Davis, Attorneys, Department of Justice, were on the brief for respondent.

Before EDGERTON and PROCTOR, Circuit Judges, and H. CHURCH FORD, District Judge sitting by designation.

FORD, District Judge.

Under the Renegotiation Act of April 28, 1942, 56 Stat. 244-247, as amended by the Act of October 21, 1942, 56 Stat. 982-985, and as further amended by the Military Appropriations Act of July 1, 1943, 57 Stat. 347-348, by which "all the provisions" of section 403 of the 1942 Renegotiation Act, as amended, were made applicable to contracts and subcontracts with certain subsidiaries of the Reconstruction Finance Corporation, including the Defense Plant Corporation, 50 U.S.C.A.Appendix, § 1191 et seq., the Price Adjustment Board of the Reconstruction Finance Corporation made an order on February 28, 1945, setting out its findings and determination that $362,098 of the profits realized by petitioner during its fiscal year ending November 30, 1942, under subcontracts with Defense Plant Corporation, upon which final payments had not been made prior to April 28, 1942, were excessive and directed that, subject to appropriate tax credit, the excessive profits so found and determined be eliminated by one or more of the methods provided by section 403 of the Act. The petitioner then filed its petition with the Tax Court of the United States for a redetermination of the questions involved, 50 U.S.C.A.Appendix, § 1191(e) (2). In the ensuing proceedings before the Tax Court, the parties entered into a stipulation which eliminated all issues of fact in respect to the amount of excessive profits realized during the period involved and left for determination by the Tax Court only questions of law raised by petitioner's contentions: (1) that renegotiation of its profits realized from business completed and paid for within its fiscal year ended November 30, 1942, was not commenced within the time allowed by the Renegotiation Act, as amended; (2) that the amendment of section 403 of the Act embodied in the Military Appropriations Act of July 1, 1943, when properly interpreted, does not apply to or subject to renegotiation contracts or subcontracts with R. F.C. subsidiaries which were completed and paid for prior to the enactment of the amendment of 1943, and (3) if the amendment be so interpreted to apply retroactively to the contracts here in question, it is unconstitutional.

The Tax Court decided each of the questions, thus presented, contrary to the contentions of the petitioner, holding that the renegotiation of petitioner's contract was timely commenced, that the amendment of July 1, 1943 applied to and authorized renegotiation of petitioner's subcontracts here in question and as so applied the amendment is not unconstitutional.

The petitioner invokes the jurisdiction of this Court to review the decision of the Tax Court under authority of sections 1141 and 1142 of the Internal Revenue Code, 26 U.S.C.A. §§ 1141, 1142.

Relying upon the so-called Second Renegotiation Act of February 25, 1944, 58 Stat. 86, § 403(e) (1), which provides that, in a proceeding for redetermination before the Tax Court, the determination of "the amount" of excessive profits is final and not reviewable by any court, the respondent challenges the jurisdiction of this Court to review the decision of the Tax Court upon the questions here presented, with special insistence upon lack of our jurisdiction to review the two non-constitutional questions.

Since the provision of the Act relied upon ascribes finality only to the Tax Court's determination of "the amount" of excessive profits (the issue eliminated by stipulation) and "leaves untouched, by direct reference or otherwise, the remaining content of section 1141(a) of the Internal Revenue Code", United States Electrical Motors v. Jones, 80 U.S.App.D.C. 329, 153 F.2d 134, 136, we think respondent's contention in respect to our lack of jurisdiction to review the questions here presented is untenable.

Section 403 of the Renegotiation Act, as amended by the Act of October 21, 1942, 56 Stat. 984, § 403(c) (6), provides that no renegotiation under the provisions of the Act shall be commenced more than one year after the close of the fiscal year of the contractor or subcontractor within which completion or termination of the contract occurred. In view of this provision, it is undisputed that the renegotiation proceeding here involved was not permissible unless commenced prior to November 30, 1943.

A brief summary of the events which took place prior to November 30, 1943...