Lincoln Electric Co. v. Knox
| Citation | 77 F. Supp. 444 |
| Decision Date | 14 June 1948 |
| Docket Number | Civ. No. 21866. |
| Parties | LINCOLN ELECTRIC CO. v. KNOX et al. |
| Court | U.S. District Court — District of Columbia |
M. Reese Dill, Thomas V. Koykka, Ashley M. Van Duzer, and McKeehan, Merrick, Arter & Stewart, all of Cleveland, Ohio, and Charles Effinger Smoot, of Washington, D. C., for plaintiff.
Philip B. Perlman, Sol. Gen. of Washington, D. C., Peyton Ford and John F. Sonnett, Asst. Attys. Gen., and George M. Fay, U. S. Atty., and Melvin H. Siegel, Atty., Dept. of Justice, both of Washington, D. C., for defendant.
Before GRONER, Chief Justice, United States Court of Appeals for the District of Columbia, and BAILEY and GOLDSBOROUGH, District Judges.
Judgment Affirmed June 14, 1948. See 68 S.Ct. 1510.
The case is now before us on a motion by defendants for summary judgment. The complaint of Lincoln Electric Company against Secretary Knox and Under-Secretary Forrestal was filed in this Court November 3, 1943. The main purpose was to obtain a decree that the Renegotiation Act in its form prior to the amendments of February 25, 1944, is unconstitutional and unenforceable. Defendants answered January 20, 1944, denying unconstitutionality and setting up various other defenses. Subsequently the present motion was filed, in which the position of the defendants, shortly stated, is that the Court lacks jurisdiction because the suit is in legal effect against the United States, which have not consented to be sued, and that the plaintiff has available to it adequate legal and administrative remedies.
Plaintiff is engaged in the manufacture and sale of electric equipment. The greater portion of its business is with customers scattered throughout the United States. The portion directly with the Departments of the United States is said to be less than 8% of the whole. The period here involved is the year ending December 31, 1942. Acting under the Renegotiation statute,1 defendants called on plaintiff for certain information in relation to its operations and sales for the year in question, and as a result of the examination of the data furnished, determined that plaintiff had realized "excessive" profits of more than $3,000,000, and notified it that unless action were taken prior to November 5, 1943, in making proper restitution, defendants would direct the withholding of amounts due plaintiff by the Government and would likewise direct the withholding by plaintiff's customers of so much as might be due to plaintiff by them.
Defendants subsequently — that is to say, in January, 1944, long after the suit was filed — withdrew their threat to seize funds due plaintiff by its customers, and thereafter relied for restitution upon the seizure of sums due by the United States. But as to this plaintiff says that its rights to relief accrued as of the facts existing when the suit was brought and that the subsequent modification of the threat will not avail, since defendants may again change their minds, as they have the right to do under the appropriate act. This brings us, then, for present purposes, to consider (1), whether the suit is necessarily against the United States, and if it is not, (2), whether Congress has otherwise provided an adequate remedy in the amendment of 1944, authorizing redetermination in a proceeding in the Tax Court.
We are not unmindful of the difficulty of stating an exact formula for determining when a suit against an officer is a suit against the United States. Brooks v. De War, 313 U.S. 354, 359, 61 S.Ct. 979, 85 L.Ed. 1399. But where the relief asked is that the officer be restrained from acting to enforce an unconstitutional law in such a way as to injure the property rights of the plaintiff, the proceeding is one against the officer. The single exception is the situation in which the United States, because of the nature of the decree to be issued, are indispensable parties to the suit. If, for example, the object is to compel specific performance of a contract between the United States and the plaintiff, or to compel an officer to pay money out of the Treasury or otherwise to hand over to the plaintiff property which the United States claim to own, or to prevent the United States from using property which they own, or claim to own, — in all these cases the United States are the real parties in interest and the suit must fail. But the effect of an injunction in this case would not be to compel specific performance of a Government contract or payment of money out of the Treasury. The injunction would simply prevent a Government official from acting under an unconstitutional statute (if it should be found to be such), so as to interfere with valid contract relations between Lincoln and its customers. Whether the contracts will eventually be performed, and whether the money will be paid to Lincoln, depends upon many other circumstances which are not involved in the present action, and the right of the United States to withhold money owing to Lincoln is unaffected by anything which is asked for here.
If this is a correct statement of the case we have, then it would seem to follow that the suit is not against the United States and the doctrine announced in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann. Cas. 764, would be controlling. At page 159 of 209 U.S., at page 454 of 28 S.Ct. the Supreme Court said: ...
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