Whittier v. Emmet

• Decision Date: 23 June 1960
• Docket Number: No. 15066-15068.,15066-15068.
• Parties: Sumner G. WHITTIER, Administrator of Veterans Affairs, et al., Appellants, v. Herman L. R. EMMET, Jr., On Behalf of Himself and all Others Similarly Situated, Appellee. UNITED STATES of America, Appellant, v. James A. DEERING, On Behalf of Himself and all Others Similarly Situated, Appellee. UNITED STATES of America, Appellant, v. Robert H. MABBUTT et al., Suing for Themselves and all Persons Similarly Situated, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

108 US App. DC 191, 281 F.2d 24 (1960)

Sumner G. WHITTIER, Administrator of Veterans Affairs, et al., Appellants, v. Herman L. R. EMMET, Jr., On Behalf of Himself and all Others Similarly Situated, Appellee.

UNITED STATES of America, Appellant, v. James A. DEERING, On Behalf of Himself and all Others Similarly Situated, Appellee.

UNITED STATES of America, Appellant, v. Robert H. MABBUTT et al., Suing for Themselves and all Persons Similarly Situated, Appellees.

Nos. 15066-15068.

United States Court of Appeals District of Columbia Circuit.

Argued November 19, 1959.

Decided June 23, 1960.

Petition for Rehearing Denied September 16, 1960.

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Mr. Lionel Kestenbaum, Atty., Dept. of Justice, with whom Asst. Atty. Gen., George C. Doub, Messrs. Oliver Gasch, U. S. Atty., and Morton Hollander, Atty., Dept. of Justice, were on the brief, for appellants.

Mr. John Geyer Tausig, Washington, D. C., with whom Messrs. Henry F. Butler and John T. Koehler, Washington, D. C., were on the brief, for appellees.

Before Mr. Justice BURTON, retired,^* and WASHINGTON and DANAHER, Circuit Judges.

Petition for Rehearing en Banc Denied September 16, 1960.

Mr. Justice BURTON.

Under Article IV of the Soldiers' and Sailors' Civil Relief Act of 1940, the United States guaranteed the payment of premiums on limited amounts of commercial life insurance policies carried by servicemen.¹ In 1942 the Act was amended to include, for the first time, an express provision that when such an insurance premium payment was made by the United States, it evidenced a debt due to the United States from the insured serviceman on whose account the payment was made. The amendments also provided that such debts to the United States were collectible either by their deduction from amounts due the insured servicemen from the United States or as otherwise authorized by law.²

The Administrator of Veterans' Affairs interpreted Article IV of the 1940 Act, prior to the 1942 Amendments, as establishing by implication a comparable obligation on the part of the insured servicemen to reimburse the Government for its payment of the guaranteed premiums. Under this interpretation, the Administrator collected over $1,640,000 from approximately 8,400 insured servicemen. He did this in large part by offsetting against the debts of the respective servicemen the dividends due them in connection with their National Service Life Insurance policies.³

Although there was some acquiescence in the Administrator's interpretation of the 1940 Act, there also was vigorous opposition to it. This resulted in conflicting judicial decisions⁴ culminating in 1957 in the Supreme Court's decision, with three Justices dissenting, in United States v. Plesha, 352 U.S. 202, 77 S.Ct. 275, 1 L.Ed.2d 254. In that case the Supreme Court held that, contrary to the Administrator's interpretation of the 1940 Act, prior to the 1942 Amendments, the insured servicemen were not obligated to reimburse the Government for its payment of premiums on their account.

After the Plesha decision, the next problem was that of returning to the servicemen their funds which had been used erroneously by the Government to reimburse itself for its payment of the guaranteed premiums.

To facilitate such refunding, Congress, in 1958, enacted Public Law 85-586.⁵ That Act authorized the Administrator of Veterans' Affairs, upon timely application, to refund to the servicemen, without interest, all amounts collected from them by the United States under its erroneous interpretation of the 1940 Act. Public Law 85-586 made available the money to make such refunds and also provided that the right to such refunds was not to be denied by reason of statutory time limitations, judgments theretofore rendered, or "any other technical defense."

In the three cases now before us plaintiffs ask not only for the principal of the sums claimed, but also for interest on delayed dividends due them under their National Service Life Insurance policies. Furthermore, they ask for the allowance of attorneys' fees to cover services rendered not only to the named parties to the litigation, but to all persons similarly situated.

In No. 15066, the plaintiff, Emmet, sought a writ of mandamus from the District Court for the District of Columbia ordering the defendant officials to make the payments requested.

In Nos. 15067 and 15068 the plaintiffs, Deering and Mabbutt, brought suit, respectively, in the District Court for the Southern District of New York and the District Court for the Northern District of California for the payment of their claims pursuant to the Tucker Act,⁶ and the National Service Life Insurance Act.⁷ Those courts transferred the cases to the District Court for the District of Columbia in reliance upon 28 U.S.C. § 1404(a).⁸

That court consolidated the cases and granted a preliminary injunction, which is still in effect, forbidding the disbursement of more than 90% of the respective payments authorized by Public Law 85-586. It overruled all objections to its jurisdiction and to the propriety of taking action on the merits of the issues presented. After a plenary hearing it ordered payment by the Government not only of the amounts provided for in Public Law 85-586, but also of interest at 3% per annum on an amount equal to the value of the National Service Life Insurance dividends.⁹ It also authorized the payment of attorneys' fees of 5% on the aggregate amount of principal and interest to be refunded under Public Law 85-586.

The Government, on appeal, seeks a reversal of the judgment below on the ground that none of these actions should have been heard by the District Court for the District of Columbia. On the merits, the Government contends that neither the allowance for interest nor that for attorneys' fees was justified. For the reasons hereafter stated, we agree with the Government.

In No. 15066, originating in 1955 in the District Court for the District of Columbia, Emmet sought to litigate the question later resolved by the Supreme Court in United States v. Plesha, supra. He asked for a writ of mandamus directed against the Administrator of Veterans' Affairs, the Secretary of the Treasury, the Treasurer of the United States and the Comptroller General. It is elemental, however, that this extraordinary remedy was not available for such purpose, inasmuch as the Tucker Act provided an adequate remedy at law to test the question.¹⁰ The pecuniary liability of the United States may be determined only through such procedures as the United States has authorized. Moreover, a writ of mandamus will be issued only to compel the performance of a ministerial duty as distinguished from one calling for exercise of discretion.¹¹ In this case the amounts claimed had not yet been determined at the time the action was filed. While this case was pending, the decision in the Plesha case and the enactment of Public Law 85-586 settled the major legal issues. They did not, however, authorize an allowance for interest and another for attorneys' fees as sought by the plaintiff. The way to reach those issues is not by writ of mandamus. Accordingly, the complaint in the Emmet case must be dismissed on jurisdictional grounds insofar as it applies to mandamus.

Deering and Mabbutt sought relief comparable to that sought in the Emmet case but by a different procedure. They filed their complaints in the District Courts of their respective districts of residence. Each alleged that jurisdiction existed in those courts both under the Tucker Act and the National Service Life Insurance Act. On motions of plaintiffs those courts transferred both cases to the District Court for the District of Columbia under authority of 28 U.S.C. § 1404(a). The Government here contends that the complaints should have been dismissed or the cases re-transferred to permissible districts.

Section 1404(a) limits transfers of such cases to those districts where the action might have been brought in the first instance.¹² Such limitation excludes venue in this district under the Tucker Act, because by § 1402(a) venue under the Tucker Act is limited to the courts of the districts of the plaintiffs' residence or to the Court of Claims.

But plaintiffs also contend that venue lies in the District Court for the District of Columbia under the National Service Life Insurance Act of 1940.¹³ Under the jurisdictional provision of that Act, actions involving disagreements as to claims under National Service Life Insurance contracts may be brought either in the district of the plaintiff's residence or in the District Court for the District of Columbia.

That provision, however, does not apply to the instant cases because the complaints here seek to recover the collections erroneously made by the Government in reliance upon the Soldiers' and Sailors' Civil Relief Act of 1940, not the National Service Life Insurance Act. The cases before us do not involve any disagreement about dividends under the Insurance Act. The Government admits the plaintiffs' right to those dividends. It disbursed them from the Insurance Fund and credited plaintiffs' accounts by offsetting the erroneous claims of the Government under the Soldiers' and Sailors' Civil Relief Act.

Even if these differences be treated as disagreements as to dividends, it still would be necessary to show here that this disagreement was one for an "insurance benefit" within the meaning of 38 U.S.C. § 784(h).¹⁴ Candell v. United States, 10 Cir., 1951, 189 F.2d 442, indicates that disputes over dividends do not so qualify. As was pointed out in Candell, insurance dividends are realized as a result of low mortality experience and economies in the operation of the insurance company. They are unrelated to the obligation to pay the particular policyholder for a loss insured against and are not the same sort of payment as an insurance benefit.

Furthermore, the "disagreement" which is a prerequisite to a suit under the...