United States v. Schneider

Decision Date28 March 1956
Citation139 F. Supp. 826
PartiesUNITED STATES of America, Plaintiff, v. Meyer SCHNEIDER, Defendant.
CourtU.S. District Court — Southern District of New York

Paul W. Williams, U. S. Atty., New York City, Eliot H. Lumbard, Asst. U. S. Atty., New York City, of counsel, for plaintiff.

Charles A. Hirsch, Brooklyn, N. Y., Louis M. Leibowitz, Brooklyn, N. Y., of counsel, for defendant.

BICKS, District Judge.

This is an action by the United States to recover the sum of $2000. pursuant to Section 26(b) of the Surplus Property Act of 1944.1

The facts which give rise to the suit appear to be as follows: Some time prior to November 22, 1948, defendant entered into an agreement to purchase certain surplus scrap wool and cotton material stored at the United States Air Force Base in Great Falls, Montana. In the course of arranging for removal of the purchased materials defendant sought to enlist the aid of the Air Force Base Salvage Officer in furtherance of a fraudulent scheme to obtain valuable property stored in the warehouse in addition to the material he had purchased. The Base Salvage Officer reported this conversation to a representative of the Federal Bureau of Investigation and was instructed not to encourage the defendant but to accede to any proposal made by him. The defendant proceeded with his furtive plan, loaded the anticipated loot into a railroad freight car and handed $1,500 in cash as a bribe to the Air Force Officer who promptly turned the money over to agents of the F. B. I. Indictment and prosecution of the defendant for violating Title 18 U.S.C.A. § 2012 followed. The jury found the defendant guilty. On appeal, the conviction was reversed on the ground that the jury was erroneously instructed on the subject of "intent". Schneider v. United States, 9 Cir., 1951, 192 F.2d 498. Defendant thereafter entered a plea of guilty.

Sub judice are cross motions for summary judgment. There does not seem to be a genuine issue as to any material fact. To be true, the defendant does not expressly concede the facts set forth in the Government's moving papers, but neither does he controvert them. Instead he urges (a) Title 28 U.S.C.A. § 2462,3 the applicable statute of limitations to a suit to recover a civil fine or penalty, as a complete bar, and (b) that the doctrine of collateral estoppel relied on by the Government is not applicable in this case.

The availability of § 2462 as a defense turns upon whether § 26(b) of the Surplus Property Act of 1944 imposes a civil penalty or a civil sanction of a remedial character.

In Rex Trailer Co. v. United States, 1956, 350 U.S. 148, 76 S.Ct. 219, 221, the Supreme Court held that § 26(b) creates a right to recover liquidated damages, thus putting at rest an asserted conflict between the decisions of the Courts of Appeals of the 5th, 6th and 7th Circuits. See United States v. Weaver, 5 Cir., 1953, 207 F.2d 796; United States v. Witherspoon, 6 Cir., 1954, 211 F.2d 858; United States v. Rex Trailer Co., 7 Cir., 1955, 218 F.2d 880. "Liquidated damage provisions, when reasonable," the Court said, "are not to be regarded as penalties, United States v. United Engineering & Contracting Co., 234 U.S. 236, 241, 34 S.Ct. 843, 845, 58 L.Ed. 1294, and are therefore civil in nature." The liability imposed by § 26(b), like the essentially similar liabilities created by the False Claims Act, 31 U.S.C.A. § 231 and the Revenue Act of 1928, c. 852, § 293, 45 Stat. 791, 26 U.S.C.A.Int.Rev.Acts, page 431, is not a criminal penalty. It is not barred by the double jeopardy clause though sought to be enforced post conviction or acquittal in a criminal prosecution. Rex Trailer Co. v. United States, supra; United States ex rel. Marcus v. Hess, 1943, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443; Helvering v. Mitchell, 1938, 303 U.S. 391, 58 S.Ct. 630, 636, 82 L.Ed. 917.

In Helvering v. Mitchell, supra, the Supreme Court decided that the 50% assessment for fraud with intent to evade income taxes under the Revenue Act of 1928 was "a civil administrative sanction". The Court of Appeals has held that "what was said in Helvering v. Mitchell, * * * to the effect that such additions are but civil administrative sanctions of a remedial character in aid of the assessment and collection of taxes" is to be "taken to mean not only that they were not penalties imposed as punishment for crime, which was what was actually decided in the Mitchell case, but that, as the language in that opinion indicates, they are not to be considered penal in any sense." Scadron's Estate v. Commissioner of Internal Revenue, 2 Cir., 1954, 212 F.2d 188, certiorari denied, 1954, 348 U.S. 832, 75 S.Ct. 55, 99 L.Ed. 656; see also Kirk v. Commissioner, 1 Cir., 1950, 179 F.2d 619, 15 A.L.R.2d 619; and Reimer's Estate v. Commissioner, 6 Cir., 1950, 180 F.2d 159. The nature of the recovery is not altered by the failure of the Government to allege specific damages or its inability to show actual damage, since, as was held in Rex Trailer Co. v. United States, supra, the remedy provided by § 26(b) is comparable to the recovery under liquidated damage provisions which fix compensation for anticipated loss. See United States ex rel. Marcus v. Hess, supra. The statute of limitations is ,therefore, not available as a defense in the instant action.

The defendant's plea of guilty to the indictment returned against him in the District of Montana estops him under familiar doctrine from relitigating the issues actually determined in that proceeding. Cromwell v. County of Sac, 1876, 94 U.S. 351, 24 L.Ed. 195; United States v. International Building Co., 1953, 345 U.S. 502, 73 S.Ct. 807, 97 L.Ed. 1182; United States v. Ben Grunstein & Sons Co., D.C.D.N.J.1955, 127 F. Supp. 907. Relitigation in a civil action of an issue determined adversely to the defendant in a prior criminal proceeding is foreclosed, whether the prior determination was based on the verdict of a jury, Emich Motors Corp. v. General Motors Corp., 1951, 340 U.S. 558, 71 S.Ct. 408, 95 L.Ed. 534; Local 167, etc. v. United States, 1934, 291 U.S. 293, 54 S. Ct. 396, 78 L.Ed. 804, or on a plea of guilty. United States v. Bower, D.C.E.D. Tenn.1951, 95 F.Supp. 19; United States v. Accardo, D.C.D.N.J.1953, 113 F.Supp. 784, affirmed, 3 Cir., 1953, 208 F.2d 632, certiorari denied, 1954, 347 U.S. 952, 74 S.Ct. 677, 98 L.Ed. 1098; United States v. American Precision Products Corp., D.C.D.N.J.1953, 115 F.Supp. 823; United States v. Ben Grunstein, supra. Indeed, where the prior conviction resulted from a plea of guilty there would appear to be greater warrant for application of the doctrine since the defendant has admitted the truth of the charges contained in the indictment. Since a judgment in a prior proceeding is conclusive in a subsequent action only as to the issues actually determined therein, it becomes necessary to define those issues.

The indictment charged that the defendant unlawfully and feloniously promised money to a certain officer and person acting for and on behalf of the United States in an official function, to wit, the Base Salvage Officer of the Great Falls United States Air Force Base for the purpose and with the intent to influence him to do an act in violation of his...

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11 cases
    • United States
    • U.S. District Court — District of Columbia
    • August 21, 1981
    ...of guilty is given greater scope than is a judgment of conviction after trial..." Id. at 909-10. Similarly, in United States v. Schneider, 139 F.Supp. 826 (S.D.N. Y.1956), a case involving the collateral estoppel effect of a plea under the Surplus Property Act, a statute similar to the Fals......
  • Hooper v. Guthrie
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • March 13, 1975
    ...denied 347 U.S. 952, 74 S.Ct. 677, 98 L.Ed. 1098 (1954); Bradford v. Lefkowitz, 240 F.Supp. 969 (S.D.N.Y. 1965); United States v. Schneider, 139 F.Supp. 826 (S.D.N.Y.1955); United States v. Ben Grunstein & Sons Co., 127 F.Supp. 907 In Brazzell v. Adams, supra, the court held that plaintiff,......
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    • U.S. District Court — District of Maryland
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  • Metros v. United States District Court for Dist. of Colo.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • April 23, 1971
    ...71 S.Ct. 408. The issues in the criminal action and the civil action were also very closely related in the case of United States v. Schneider, 139 F.Supp. 826 (S.D.N.Y.), where the judge "Relitigation in a civil action of an issue determined adversely to the defendant in a prior criminal pr......
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