Laycock v. Kenney

• Decision Date: 21 October 1959
• Docket Number: No. 16170.,16170.
• Citation: 270 F.2d 580
• Parties: Gladys LAYCOCK, Appellant, v. Frank J. KENNEY, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

270 F.2d 580 (1959)

Gladys LAYCOCK, Appellant, v. Frank J. KENNEY, Appellee.

No. 16170.

United States Court of Appeals Ninth Circuit.

September 1, 1959.

Rehearing Denied October 21, 1959.

COPYRIGHT MATERIAL OMITTED

Seitz, Easley & Whipple, Norman L. Easley, Portland, Or., Paul Bakewell, Jr., St. Louis, Mo., for appellant.

C. E. Luckey, U. S. Atty., Robert R. Carney, Asst. U. S. Atty., Portland, Or., for appellee.

Francis T. Cornish, Berkeley, Cal., amicus curiæ.

Before HAMLEY, HAMLIN and JERTBERG, Circuit Judges.

JERTBERG, Circuit Judge.

Appellant is the owner of the majority interest in gold mining property situated in Grant County, Oregon, which she alleges has been extensively developed to a point where 234,000 tons of ore are blocked out. She further alleges that she has found, as many other gold mine operators in the United States have found, that the ore cannot be economically mined and processed at the current price set for gold under the regulations of the United States Treasury Department, with the result her mine cannot be operated at a profit and remains idle with practically no resale value as a gold mine.

Claiming that the regulations directly and proximately resulted in a loss of profits and depreciation of the value of the property, appellant sought damages against the United States in a previous suit which was dismissed by trial court. This Court affirmed the dismissal, on the grounds there was no jurisdiction, the government's consent to be sued on matters arising from acquisition of gold having been expressly withdrawn by an Act of Congress, 49 Stat. 938, 939, 31 U.S. C.A. § 773b. See Laycock v. United States, 1956, 9 Cir., 230 F.2d 848, certiorari denied 351 U.S. 964, 76 S.Ct. 1028, 100 L.Ed. 1484.

Subsequently appellant initiated the present action challenging the authority of the Secretary of the Treasury under Section 3 of the Gold Reserve Act of 1934 (31 U.S.C.A. § 442), and seeking declaratory relief and an injunction to restrain the appellee, a Treasury agent for the State of Oregon, from enforcing the Treasury regulations which regulate the refining and dealing in gold.

The trial court found that the regulations controlling the entire domestic stock of existing gold and all additions thereto and subtractions therefrom are reasonably related to the duty of the Secretary of the Treasury to maintain all forms of money issued or coined by the United States at a parity of value with the dollar of gold nine-tenths fine of the weight determined under the provisions of 31 U.S.C.A. § 821, which has been declared to be the standard unit of value of money by Congress, acting within its constitutional power to "regulate the value" of money. The regulations being valid, the court granted the motion to dismiss for failure to state a claim upon which relief could be granted since such motion could be granted only if the regulations were invalid. It further ordered that the judgment of dismissal should operate as an adjudication on the merits.

Before we turn to the merits, we must first determine whether the appellant's complaint which named as defendant only a Treasury agent is sufficient to invoke the jurisdiction of the Federal District Court, even though it failed to name either the agent's superior, the Secretary of the Treasury, or the United States. The trial court apparently assumed it had jurisdiction, mentioning in its memorandum opinion only that appellant had invoked the "jurisdiction of the Court under Article III, Section 2 of the Constitution and 28 U.S.C. § 1331, seeking a declaratory judgment and injunctive relief against the defendant qua individual."

The government contends that the United States and the Secretary of the Treasury are indispensable parties and urges that the failure of the appellant to name them should result in a dismissal of her action without a consideration of the merits. See Neher v. Harwood, 9 Cir., 1942, 128 F.2d 846, 847, 158 A.L.R. 1116. The government's position is that the United States and the Secretary of the Treasury are indispensable parties when the relief sought by the plaintiff would "substantially" interfere with "public administration". This argument is based on a supposition proposed by Justice Douglas in Land v. Dollar, 1947, 330 U.S. 731, 738, 67 S.Ct. 1009, 1012, 91 L.Ed. 1209, when he said:

"The `essential nature and effect of the proceeding\' may be such as to make plain that the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration. Ex parte New York, 256 U.S. 490, 500, 502, 41 S.Ct. 588, 590, 591, 65 L.Ed. 1057. If so, the suit is one against the sovereign. Mine Safety Appliances Co. v. Forrestal, supra, 326 U.S. 371 at page 374, 66 S. Ct. 219, at page 221 90 L.Ed. 140."

But Ex parte New York and Mine Safety Co. v. Forrestal are cases in which the sovereign was declared to be an indispensable party because the judgment sought would expend itself on the public treasury. Neither case mentions any interference with "public administration." Justice Douglas repeated the phrase in Williams v. Fanning, 1947, 332 U.S. 490, 68 S.Ct. 188, 92 L.Ed. 95, but there decided that the Postmaster General was not an indispensable party in the action for an injunction against one of his postmasters since the "decree order to be effective need not require the Postmaster General to do a single thing." Id., 332 U.S. 493, 68 S.Ct. 189. Aside from the dictum of Justice Douglas, the government has not cited any authority in which it was held that in a suit against an individual government officer the United States or his superiors were indispensable parties because the relief sought would "interfere with public administration". Nevertheless, the government asks us to deny jurisdiction in this case on the ground that the relief sought would "substantially interfere with public administration". Neither the words of Justice Douglas nor the cases cited require such a result.

The other cases cited by the government as requiring either the government or the Secretary to be joined are clearly distinguishable. In Larson v. Domestic and Foreign Commerce Corp., 1949, 337 U.S. 682, 691, 69 S.Ct. 1457, 93 L.Ed. 1628, no claim was made, as it was here, that the defendant, who was a United States agent, was acting unconstitutionally or pursuant to an unconstitutional grant of power. In Ogden River Water Users Ass'n v. Weber Basin Water Conservation Dist., 10 Cir., 1956, 238 F.2d 936, the claim was made that the defendants were violating plaintiff's rights under the Fifth Amendment by taking plaintiff's property without due process of law. The court specifically pointed out the plaintiff had adequate remedies to obtain recourse for any damages. Id. at page 942. Here we have previously held that plaintiff has no such remedy for damages. Laycock v. United States, supra, 230 F.2d 850.

The appellant's complaint alleges that the defendant's threatened enforcement of the Treasury regulation is unconstitutional, is without authority of law, and the judgment sought requires no affirmative act on the part of the Secretary of the Treasury, the expenditure of funds or any other affirmative relief. There is no doubt that if granted, the relief sought would expend itself solely and completely on the named defendant. The suit rests upon the charge of lack of authority, both constitutional and statutory, and its merits must be determined accordingly; it is not a suit against the United States. Harmon v. Brucker, 1958, 355 U.S. 579, 581-582, 78 S.Ct. 433, 2 L.Ed.2d 503; Stark v. Wickard, 1944, 321 U.S. 288, 318, 64 S.Ct. 559, 88 L.Ed. 733; State of Missouri v. Holland, 1920, 252 U.S. 416, 431, 40 S.Ct. 382, 64 L.Ed. 641, 11 A.L.R. 984; Philadelphia Co. v. Stimson, 1912, 223 U.S. 605, 619-620, 32 S.Ct. 340, 56 L.Ed. 570. By the same token it is not a suit requiring any affirmative action either by the United States or any government official, and for that reason as well neither the United States nor any of the defendant's superior officers need be named. Hynes v. Grimes Packing Co., 1949, 337 U.S. 86, 97-98, 69 S.Ct. 968, 93 L.Ed. 1231; Williams v. Fanning, supra, 332 U.S. at pages 493-494, 68 S.Ct. 188; Land v. Dollar, supra, 330 U.S. at page 737, 67 S.Ct. 1009; State of Colorado v. Toll, 1925, 268 U.S. 228, 230, 45 S.Ct. 505, 69 L.Ed. 927; United States v. Lee, 1882, 106 U.S. 196, 218-220, 1 S.Ct. 240, 27 L.Ed. 171. Clearly, appellant's complaint alleges sufficient facts to permit the district court to proceed to the merits on which its jurisdiction must rest, without joining either the United States or the agent's superior officers. Larson v. Domestic and Foreign Commerce Corp., supra, 337 U.S. 690, 69 S.Ct. 1457; Land v. Dollar, supra, 330 U.S. 739, 67 S.Ct. 1009.

The government suggests that the relief sought would expend itself on the public treasury. Just how the government does not state. No money judgment is sought, and since the appellant is not presently supplying gold to the Treasury anyway, there would be no direct consequences. Any other effect on the Treasury would be too conjectural upon which to deny jurisdiction.

The government's final point dealing with jurisdiction is that the government has withdrawn consent to be sued under 31 U.S.C.A. § 773b, and therefore this suit cannot be brought. But where, as here, the suit is in fact directed not at the government but at an individual who is allegedly acting without authority, and the relief sought requires nothing affirmative from the government, the government itself is not being sued so no question of sovereign immunity arises; the unauthorized or unconstitutional acts of the officer are not then the acts of the sovereign. Larson v. Domestic and Foreign Commerce Corp., supra, 337 U.S. 690, and cases collected in Justice Frankfurter's dissent at pages 710, 714-715, 731-732, 69 S.Ct. 1457; Land v. Dollar, supra, 330 U.S. at page 738, 67 S.Ct. 1009.

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