United States v. Lichter, Civ. No. 1176.

• Court: U.S. District Court — Southern District of Ohio
• Writing for the Court: Ray J. O'Donnell, U. S. Atty., for Southern of Ohio, of Cincinnati, Ohio, for plaintiff
• Citation: United States v. Lichter, 68 F.Supp. 19 (S.D. Ohio 1946)
• Decision Date: 21 June 1946
• Docket Number: Civ. No. 1176.
• Parties: UNITED STATES v. LICHTER et al.

68 F. Supp. 19

UNITED STATES v. LICHTER et al.

Civ. No. 1176.

District Court, S. D. Ohio, W. D.

June 21, 1946.

Ray J. O'Donnell, U. S. Atty., for Southern District of Ohio, of Cincinnati, Ohio, for plaintiff.

Steer, Strauss & Adair, of Cincinnati, Ohio, for defendant.

DRUFFEL, District Judge.

This cause came on for hearing before the Court on February 18, 1946, on the motions of plaintiff for summary judgment and for judgment on the pleadings, and the Court, having considered the pleadings, the motions filed by plaintiff, the affidavits filed in support thereof and in opposition thereto, and having considered the motion to dismiss the complaint thereafter filed by defendants and the briefs and arguments of counsel, and having taken the case under advisement, now finds the facts and states the conclusions of law as follows:

Findings of Fact

(1) At all times herein mentioned, defendants resided in Cincinnati, Hamilton County, Ohio, and did business in that city as copartners under the firm name and style of Southern Fireproofing Company.

(2) The business of the Southern Fireproofing Company is the construction of brick masonry structures customarily by subcontracts, a type of work which is in general similar to brick masonry work as it has been known in the construction industry for many years. Defendants allege, and for the purpose of these findings it is assumed, that the prime contracts set out in Exhibit A to the complaint were contracts with a Department, awarded as a result of competitive bidding for the construction of buildings and facilities, and that the subcontracts involved in this action were subcontracts under said prime contracts, and were obtained by defendants after further competitive bidding.

(3) On October 20, 1944, Robert P. Patterson, then Under Secretary of War, acting pursuant to the Renegotiation Act, as amended, 50 U.S.C.A.Appendix, § 1191, made a unilateral order (in the words and figures set out in Exhibit A to the complaint) determining that defendants had realized excessive profits of $70,000 during the calendar year 1942 on the subcontracts.

Defendants' profit, before taxes and before renegotiation, on these subcontracts was determined by the representatives of the Under Secretary of War to be $136,429.

(4) On October 20, 1944, the Under Secretary of War directed defendants to pay to the Treasurer of the United States on or before November 6, 1944, said excessive profits of $70,000, less the tax credit, if any, to which defendants might be entitled under the provision of Section 3806 of the Internal Revenue Code, 26 U.S.C.A. Int. Rev.Code, § 3806.

(5) The tax credit to which defendants are entitled under Section 3806 of the Internal Revenue Code is in the sum of $42,980.61.

(6) Defendants have refused to pay to the United States said excessive profits of $70,000 less the aforesaid tax credit.

(7) Defendants have not filed a petition in the Tax Court of the United States for a redetermination of the amount of their excessive profits and the time for filing such a petition has expired.

(8) There is no genuine issue between the parties as to any material fact and plaintiff is entitled to judgment as a matter of law.

Conclusions of Law

(1) The Court has jurisdiction over this action and the parties thereto.

(2) The Renegotiation Act as enacted on April 28, 1942, and as thereafter amended is a constitutional exercise of...