King v. United States

• Decision Date: 16 February 1968
• Docket Number: No. 248-65.,248-65.
• Citation: 390 F.2d 894,182 Ct. Cl. 631
• Parties: John P. KING v. The UNITED STATES.
• Court: U.S. Claims Court

182 Ct. Cl. 631, 390 F.2d 894 (1968)

John P. KING v. The UNITED STATES.

No. 248-65.

United States Court of Claims.

February 16, 1968.

COPYRIGHT MATERIAL OMITTED

Neil B. Kabatchnick, Washington, D. C., attorney of record, for plaintiff. Richard H. Love, Washington, D. C., of counsel.

James A. Pemberton, Jr., Washington, D. C., with whom was Asst. Atty. Gen. Edwin L. Weisl, Jr., for defendant.

Warner W. Gardner, Washington, D. C., for amicus curiae, Committee of American Steamship Lines. Shea & Gardner, Robert T. Basseches and John R. Kramer, Washington, D. C., of counsel.

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

ON DEFENDANT'S MOTION TO DISMISS THE PETITION

DAVIS, Judge.

In 1959 Colonel John P. King was retired from the Army for longevity (i. e., years of service) after having accrued over thirty years for pay purposes. Under 10 U.S.C. §§ 3911, 3991 (1964), his longevity retirement pay rate has been 75 per cent of the monthly basic pay of a colonel. He contends, however, that he should have been retired for disability and that the Secretary of the Army (through the Physical Disability Appeal Board and the Board for Correction of Military Records) acted arbitrarily and capriciously in failing to retire him for disability and in refusing to correct his military record to show retirement on that ground.

Were plaintiff retired for disability, the maximum retirement pay rate to which he would then be entitled would be the same as that for longevity. See 10 U.S.C. §§ 1201, 1401 (1964). But Int.Rev.Code of 1954, § 104(a) (4), excludes from gross income "amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country * * *." Colonel King, counting on the application of this provision to the disability retirement pay he claims, filed his petition here for the difference — equal to the federal taxes assessed on his retirement pay — between disability pay and the longevity compensation he has received after taxes.

Before bringing suit, he did not, however, file a claim with the Commissioner of Internal Revenue for a refund of the taxes paid on his retirement benefits. Since Int.Rev.Code of 1954, § 7422(a), bars a suit for taxes in the absence of a timely refund claim, we issued an order¹ upholding, in effect, the Government's first affirmative defense (that the "petition alleges basically a claim for a refund of taxes paid on retirement pay, without an allegation of the filing of a claim for refund") and suggesting that the sole relief which plaintiff could now possibly have from this court would be a declaration of his right to be retired for physical disability and to have his records changed accordingly. Compare Prince v. United States, 119 F.Supp. 421, 422, 127 Ct.Cl. 612, 614, 623 (1954) (a similar suit in which timely refund claims had been filed).

Because of the history of the point in this court (see Part I infra) and on account of the defendant's explicit challenge (in its motion to dismiss) to our authority to give declaratory relief, we invited reconsideration of the application of the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02 (1964), to the Court of Claims and to Colonel King's case. Plaintiff and defendant have each presented briefs and oral argument. In addition, the amicus curiae, in support of plaintiff, has offered written and oral arguments of great help. We are not now concerned, it need hardly be said, with the merits of the plaintiff's retirement for longevity, rather than physical disability, or the refusal to correct his military records. The sole issue at this stage is the pertinence of the Declaratory Judgment Act, which provides:

2201. Creation of remedy.

In a case of actual controversy within its jurisdiction, except with respect to federal taxes, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

2202. Further relief.

Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment.

I

Since this is a reworking of old ground, not a first plowing, we start with the embedded authority. There are, of course, a raft of cases which can conceivably be seen as warning that a declaration may not be granted by this court or in suits against the United States.² The vast majority are quite distinguishable. Among them are decisions in which declaratory relief could not be granted because the suit was "with respect to federal taxes", a category expressly exempt from the Declaratory Judgment Act,³ and those in which the prayer for relief, either explicitly or as construed by the court, was for specific relief.⁴ Nor do we think that any considered implication of the absence of the remedy can be drawn from decisions limiting a money recovery in this court to the amount owing at the date of judgment;⁵ holding that, for the purposes of the statute of limitations, "no cause of action accrues before the claimant can bring a suit for a money judgment";⁶ and indicating that the Tucker Act does not supply jurisdiction to grant nominal damages.⁷

In addition, the denial of declaratory relief in this court and in other suits against the United States has often rested squarely on the ground that the court had no right to grant any relief (money award, specific relief, or declaratory judgment) because, in the various phrasings used in the opinions, the Government had not consented to be sued on the particular cause of action, the matter was nonjusticiable, there was no jurisdiction over the subject matter, the issue was legislatively committed to exclusive agency discretion, relief would interfere with the remedial scheme established by the Congress, or the claimant failed to set up any valid cause of action.⁸ Similarly, in many of the cases saying broadly that a declaration cannot be given in litigation against the Government, the real concern was that granting a declaratory judgment would improperly circumvent the restrictions (judicial or legislative) on other forms of relief.⁹

This survey shows, we think, that we need not be daunted in our reconsideration by the great mass of the repeated observations that the declaratory device is unavailable in actions against the sovereign. We are faced, however, with a small residue of decisions truly in point, mainly those of our own authorship. The leading adverse case, Twin Cities Properties, Inc. v. United States, 81 Ct.Cl. 655 (1935), was decided the year after the Declaratory Judgment Act. Others which followed Twin Cities, explicitly or implicitly, are United States Rubber Co. v. United States, 160 F.Supp. 492, 500, 142 Ct.Cl. 42, 55 (1958); Prentiss v. United States, 115 Ct.Cl. 78, 81 (1949) ("in effect" a suit for a declaratory judgment); and Yeskel v. United States, 31 F.Supp. 956, 957-958 (D.N.J.1940). See also Cobb v. United States, 240 F.Supp. 574, 577-579 (W.D. Ark.1965) (construing a prayer for declaratory relief as a prayer for money judgment.)

On the other hand, Raydist Navigation Corp. v. United States, 144 F.Supp. 503 (E.D.Va.1956), holds that a court having Tucker Act jurisdiction of actions against the Government may grant a declaratory judgment. The remedy has also been held proper in comparable Government litigation under (i) the Suits in Admiralty Act,¹⁰ (ii) the National Service Life Insurance Act,¹¹ (iii) the Trading With the Enemy Act,¹² (iv) the Federal Tort Claims Act (at least as a "procedural step" toward obtaining damages),¹³ and (v) 28 U.S.C. § 2410 (1964), which provides for actions to quiet title to property on which the United States has or claims a mortgage or other lien.¹⁴

Despite Twin Cities and its influence, this court has indicated in recent years that the question is still open and that declaratory relief may possibly lie against the Government. In Luckenbach S.S. Co. v. United States, 292 F.2d 913, 155 Ct.Cl. 81 (1961), the opinion not only took the position that a declaratory judgment could be entered against the United States by a district court sitting in admiralty and administering the Suits in Admiralty Act (292 F.2d at 916-917, 155 Ct.Cl. at 85-87), but rebutted in a lengthy footnote the plaintiff's broader argument that declaratory relief can never run against the sovereign (292 F.2d at 916 n. 5, 155 Ct. at 85 n. 5). (The note cited the cases, supra, holding declaratory relief available under the Federal Torts Claim Act and the Tucker Act, as it applies to the district courts.) Furthermore, in Eastport S.S. Corp. v. United States, 372 F.2d 1002, 178 Ct.Cl. 599 (1967), when discussing the limits of our jurisdiction, we expressly "put to one side the possible applicability of the Declaratory Judgment Act * * *." 372 F.2d at 1007 n. 5, 178 Ct.Cl. at 605 n. 5.

While the Supreme Court has never reviewed the bearing of the Declaratory Judgment Act on Tucker Act controversies,¹⁵ it has often mentioned, in other contexts, that the Court of Claims "has been given jurisdiction only to award money damages * * *." Glidden Co. v. Zdanok, 370 U.S. 530, 557, 82 S.Ct. 1459, 1476, 8 L.Ed.2d 671 (1962); see, e. g., United States v. Jones, 336 U.S. 641, 670, 69 S.Ct. 787, 93 L.Ed. 938 (1949); United States v. Sherwood, 312 U.S. 584, 588, 61 S.Ct. 767, 85 L.Ed. 1058 (1941). As discussed in Part III infra, we do not believe that the concept of "money judgment" jurisdiction precludes declaratory relief. We are therefore free, as we see it, of any Supreme Court mandate, and need grapple only with Twin Cities and the other holdings we have ourselves...