Howell Electric Motors Co. v. United States, 10736.

• Decision Date: 07 March 1949
• Docket Number: No. 10736.,10736.
• Citation: 172 F.2d 953
• Parties: HOWELL ELECTRIC MOTORS CO. v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Sixth Circuit

172 F.2d 953 (1949)

HOWELL ELECTRIC MOTORS CO. v. UNITED STATES et al.

No. 10736.

United States Court of Appeals Sixth Circuit.

March 7, 1949.

Edward S. Reid, Jr. and Wm. G. Butler, both of Detroit, Mich. (Miller, Canfield, Paddock & Stone, of Detroit, Mich., of counsel), for appellant.

Newell A. Clapp, of Washington, D. C. (H. G. Morison and Newell A. Clapp, both of Washington, D. C., Thomas P. Thornton, and Roger P. O'Connor, both of Detroit, Mich. and Oscar H. Davis and Robert Mandel, both of Washington, D. C., on the brief), for appellees.

Before ALLEN, MARTIN and McALLISTER, Circuit Judges.

PER CURIAM.

The sole question presented by this appeal is whether the second amendment of the Renegotiation Act, 57 Stat. 347, 50 U.S.C.A. Appendix § 1191, may constitutionally be given retroactive application to appellant's war contracts upon which performance had been completed and final payment had been made during the period from April 28, 1942, to December 31, 1942. The second amendment was enacted July 1, 1943, and appellant concedes that it was intended by Congress to be retroactive in its scope. In an action brought by the United States and the board of directors of the R.F.C. to recover a judgment for excessive war profits less certain tax credits as determined by the R.F.C. Price Adjustment Board, the District Court determined that the statute is valid and constitutional as retroactively applied, and entered judgment for the appellees.

The pertinent subsections of the second amendment provided that all of the provisions of § 403 of the Sixth Supplemental National Defense Appropriation Act of 1942 as amended should be construed to apply to subsidiaries of the R.F.C. to whom 37% of appellant's sales for the fiscal year 1942 were made.

Subsection (c) of § 403 of the Renegotiation Act as rewritten in the first amendment, subsection (c)(6), contains the following provision:

"This subsection (c) shall be applicable to all contracts and subcontracts hereafter made and to all contracts and subcontracts heretofore made, whether or not such contracts or subcontracts contain a renegotiation or recapture clause, unless (i) final payment pursuant to such contract or subcontract was made prior to April 28, 1942 * * *." 56 Stat. 984.

The above subsection plainly covers the precise transactions in controversy here because final payment was made between April 28, 1942, and December 31, 1942, that is, not prior to April 28, 1942.

We think the District Court correctly held that the statute is constitutional as applied retroactively to these 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. Lincoln Electric Co. v. Forrestal, Secretary, 334 U.S. 841, 68 S.Ct. 1510. In the Lichter case the Supreme Court specifically held, 334 U.S. pages 787-788, 68 S.Ct. pages 1317, 1318, that the renegotiation of war contracts was not a taking of private property for public use, and that the collection of renegotiated excessive profits on a war subcontract is not a deprivation of property without due process of law. It was also specifically held that the Renegotiation Act and its amendments heve been...