Tecon Engineers, Inc. v. United States

• Decision Date: 16 April 1965
• Docket Number: 115-63,356-62,355-62,26-64,114-63.,No. 354-62,354-62
• Citation: 343 F.2d 943
• Parties: TECON ENGINEERS, INC., a corporation and related cases v. The UNITED STATES.
• Court: U.S. Claims Court

343 F.2d 943 (1965)

TECON ENGINEERS, INC., a corporation and related cases v. The UNITED STATES.

Nos. 354-62, 26-64, 355-62, 115-63, 356-62, 114-63.

United States Court of Claims.

April 16, 1965.

James E. Fahey, Louisville, Ky., and Clarence T. Kipps, Jr., Washington, D. C., for plaintiffs.

S. Laurence Shaiman, Washington, D. C., with whom was Acting Asst. Atty. Gen. John B. Jones, Jr., for defendant. C. Moxley Featherston and Philip R. Miller, Washington, D. C., were on the brief.

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

DURFEE, Judge.

This opinion follows prior disposition of the case when, on February 10, 1965, the court, by order, denied plaintiffs' motion to dismiss their petitions for lack of jurisdiction, and further directed an opinion to follow. In disposing of plaintiffs' motion, the court found as follows:

(1) on May 21, 1963, the five actions were, by agreement of the parties, consolidated for trial and, thereafter, both plaintiffs and defendant filed various motions for the production and inspection of documents, for taking discovery depositions, and for other purposes, and both participated in discovery proceedings and in several pretrial conferences;

(2) on May 18, 1964, after the trial commissioner had postponed several previous settings for trial, he entered an order setting these cases for trial in Louisville, Kentucky, beginning February 1, 1965;

(3) on January 14, 1965 the trial commissioner denied plaintiffs' request for a postponement of the trial for 60 days after February 1, 1965, and on review this order was affirmed January 26, 1965;

(4) on January 26, 1965, plaintiffs filed in the United States District Court for the Eastern District of Kentucky complaints upon the same claims which are included in the petitions in this court, and on the same date plaintiffs filed their motion to dismiss their petitions, asserting that under 28 U.S.C. § 1500, this court lacks jurisdiction;

(5) before they filed the complaints in the District Court, plaintiffs had elected to institute and prosecute these actions in this court, and until January 26, 1965, when plaintiffs filed their motion to dismiss, the claims upon which plaintiffs' petitions are based were not pending in any other court.

The court further found that:

(1) on January 27, 1965, plaintiffs notified the trial commissioner that they had elected to stand on their motion to dismiss for lack of jurisdiction and would not go to trial;

(2) in their request for oral argument on their motion to dismiss, as well as during the argument in open court, plaintiffs stated that they had notified the trial commissioner that they would not go to trial if their motion to dismiss was denied and further stated that "If the court denies the plaintiffs' motion, the case will be dismissed with prejudice for failure of the plaintiffs to proceed to trial or further prosecute their cases in this court. The plaintiffs are so certain that the court no longer has jurisdiction in these cases, and that this position will ultimately be upheld, that they accept the risk of the alternative result of a dismissal of their claims with prejudice"; and

(3) plaintiffs' statements constitute a refusal to further prosecute these actions.¹

The question presented is whether plaintiffs by this motion may oust this court of its conceded jurisdiction under the Tucker Act over these pending suits by later filing new suits for the same claims in a Federal district court, and then moving to dismiss these same cases here, for lack of jurisdiction.

The jurisdictional statutes directly involved are:

28 U.S.C. (1958 ed.):

Sec. 1346 as amended by Sec. 80 of the Act of May 24, 1949, c. 139, 63 Stat. 101, and Sec. 1 of the Act of July 30, 1954, c. 648, 68 Stat. 589.

"United States as defendant.

"(a) The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:

"(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws;

* * * * * *

"§ 1500. Pendency of claims in other courts.

"The Court of Claims shall not have jurisdiction of any claim for or in respect to which the plaintiff or his assignee has pending in any other court any suit or process against the United States or any person who, at the time when the cause of action alleged in such suit or process arose, was, in respect thereto, acting or professing to act, directly or indirectly under the authority of the United States."

The reasons why plaintiffs invoke Sec. 1500 are irrelevant for the purpose of deciding their motion. They have clearly stated in their petition to dismiss and in oral argument, that if their motion to dismiss their petitions for lack of jurisdiction is denied, they would not go to trial or further prosecute their claims in this court, and would accept the risk of the alternative result of a dismissal of their claims with prejudice.

The jurisdiction of this court over suits for refund of Federal taxes is established by Section 1 of the Tucker Act of March 3, 1887 (c. 359), 24 Stat. 505, now 28 U.S.C. § 1491 (1958 ed.).

Original and concurrent jurisdiction was given to the District Courts by amendment to the Tucker Act, as stated by the Supreme Court in Glidden Co. v. Zdanok, 370 U.S. 530, 565, 82 S.Ct. 1459, 1480, 8 L.Ed.2d 671 (1962), in these words:

"In truth the District Courts have long been vested with substantial portions of the identical jurisdiction exercised by the Court of Claims. The Tucker Act, § 2, 24 Stat. 505 (1887), as amended, 28 U.S.C. § 1346 (a) (2), gives them concurrent jurisdiction over the suits it authorizes, when the amount in controversy is less than $10,000. Under that Act a District Court sits `as a court of claims,\' United States v. Sherwood, 312 U.S. 584, 591 61 S.Ct. 767, 85 L.Ed. 1058, and affords the same rights and privileges to suitors against the United States. Bates Manufacturing Co. v. United States, 303 U.S. 567, 571 58 S.Ct. 694, 82 L.Ed. 1020. * * *"

In Bates Mfg. Co. v. United States, 303 U.S. 567, 571, 58 S.Ct. 694, 696, 82 L. Ed. 1020 (1938), a tax refund suit in District Court, the Supreme Court pointed out that the Tucker Act gave the District Courts and the Court of Claims equal status as to suits for refund of taxes over which concurrent jurisdiction was given, and that under the Tucker Act Congress created:

"* * * an integrated jurisdictional plan by which the Court of Claims and District Courts could afford equal opportunities for expeditious and fair trials of like claims within the jurisdictional amount of the District Courts. * * * Uniformity and equality in substantial rights and privileges — for claimants in both forums — were essential features in the system. * * * As to substantial rights, Congress evidently meant to give claimants an identical status in both Courts where the amount in controversy was included in the jurisdiction of both. * * *"

Accordingly, the law is clearly established that the District Courts and the Court of Claims have concurrent jurisdiction over suits for refund of taxes under the Tucker Act, and that in the exercise of this concurrent jurisdiction, the District Courts and the Court of Claims have equal status.

Plaintiffs concede that they must elect between suit in the Court of Claims and suit in another court of concurrent jurisdiction. However, they contend that under Section 1500, this court has no present jurisdiction because they have later elected to bring suit in another court; further, that the statute does not provide, as the Government now asserts, that the Court of Claims can keep jurisdiction if suit was filed in the Court of Claims first. This contention is not valid for several reasons.

First, there is no requirement for express provision in the statute that this court can keep jurisdiction if suit was filed here first.²

The long established rule of comity in such cases is that the court having equal and concurrent jurisdiction over the subject matter which first obtains and exercises this jurisdiction, retains jurisdiction until a final judgment is entered. Covell v. Heyman, 111 U.S. 176, 182, 4 S.Ct. 355, 28 L.Ed. 390 (1884); Ponzi v. Fessenden et al., 258 U.S. 254, 42 S.Ct. 309, 66 L.Ed. 607 (1922); Smith v. McIver, 9 Wheat. (22 U.S.) 532, 6 L.Ed. 152 (1824); Speed Products Co. v. Tinnerman Products, 83 U.S.App.D.C. 243, 171 F.2d 727 (1948); Triangle Conduit & Cable Co. v. National Electric Products Corp., 125 F.2d 1008 (3d Cir. 1942) cert. denied, 316 U.S. 676, 62 S.Ct. 1046, 86 L.Ed. 1750 (1942); Cresta Blanca Wine Co. v. Eastern Wine Corporation, 143 F.2d 1012 (2d Cir. 1944); Ohio Steel Foundry Co. v. United States, 38 F.2d 144, 69 Ct.Cl. 158 (1930).

This clearly recognized rule of comity has not been abrogated or repealed by any language in Section 1500. To interpret the statute in the manner urged by plaintiffs would be to attribute to Congress an intention, not only to deprive this court of its established jurisdiction over pending tax refund cases, but in the process, to interfere with the orderly administration of justice as long recognized and required by the rule of comity.

The legislative history of this court and specifically the history of Section 1500 is devoid of even any intimation of such an intent by Congress. Section 1500 in essence provides that the Court of Claims "shall not have jurisdiction of any claim for or in respect of which plaintiff or his assignee has pending in any other court any suit or process against the United States or any person" who has acted for the United States. We do not construe this language to provide for a disruption of this court's lawful jurisdiction by the mere filing of a petition in the District...