finding by review panel and concurring hearing officer that there is a viable “equitable claim only upon a demonstration of ‘some unjustified governmental action that caused damage to the claimants.’ ”
How later courts described this case
- finding by review panel and concurring hearing officer that there is a viable “equitable claim only upon a demonstration of ‘some unjustified governmental action that caused damage to the claimants.’ ”
Written by the judges who cited it.
The opinion
ANDEWELT, Judge,
concurring.
As explained in the report of the review panel, this court no longer interprets the term “equitable claim” in 28 U.S.C. § 2509 as synonymous with “moral claim” and will recognize an equitable claim only upon a demonstration of “some unjustified governmental action that caused damage to the claimants.” California Canners & Growers Ass’n v. United States, 9 Cl.Ct. 774, 785 (1986), (quoting Wong v. United States, Cong.Ref. No. 3-74, slip op. at 12-13 (Ct.Cl. Nov. 23, 1977)). Herein, for the reasons articulated in the Review Panel’s report, the government did not engage in any such unjustified action and, hence, no “equitable claim” exists. However, even if Congress decides to take a different approach and to base its legislative decision on broader notions of equity, the facts as developed before the hearing officer still would not support enactment of a private bill.
*252 The essence of plaintiff’s contention that the government treated plaintiff inequitably is that the Bureau of Land Management (BLM) agreed to sell certain trees to plaintiff at one price, reneged on that agreement, and then proceeded to sell the very same trees to another purchaser at a higher price. Plaintiff argues that when it agreed to purchase the timber at a specified contract price, plaintiff not only assumed the risk that the timber would decline in value during the time period before the timber could be cut, but also reserved for itself any resulting profit if, as here, the timber increased in value during that period.
When viewed this narrowly, plaintiff’s equitable argument has considerable appeal. However, because plaintiff asks Congress to appropriate taxpayer money to redress alleged inequitable treatment by the BLM, it would seem appropriate to take a somewhat broader look at the historical relationship between plaintiff and the BLM. Specifically, it is appropriate to consider Congress’s adoption in the fall of 1984 of the Federal Timber Contract Payment Modification Act (FTCPMA), 16 U.S.C. § 618 .
In the early 1980’s, plaintiff and many other timber companies in the western states were in a precarious financial position. These companies had entered into contracts with the federal government to purchase timber at specified prices, but, between the time of contracting and the time of cutting, the value of the timber dropped precipitously. Under the terms of their respective contracts, the timber companies bore the risk of such a drop in price and the government had the right to insist on contract performance. But Congress prevented the BLM from insisting on contract performance by enacting the FTCPMA, which permitted timber companies to “buy out” their government contracts under highly favorable conditions.
Herein, the parties stipulated that had the FTCPMA not been enacted, plaintiff would have lost $11,217,796 on nine then-existing government timber contracts, a sum in excess of 50% of plaintiff’s net worth. Instead, taking advantage of the provisions of the FTCPMA, plaintiff requested and received termination of these contracts in exchange for a payment of $644,272. The government thereafter was faced with the necessity of reselling the previously sold timber, but at a lower price than plaintiff previously had agreed to pay. Thus, within six years after the 1978 Grave Creek Fire, plaintiff was saved from financial losses in excess of $10.5 million by the good graces of Congress and the financial sacrifice of the American taxpayer.
Plaintiff contends, in effect, that the two incidents are not related. Plaintiff argues that it would have received the $10.5 million bail-out even if the government had treated it equitably on the Jamison-Harris sale and, hence, the FTCPMA bail-out should not prevent plaintiff from receiving the $194,832.25 in damages that the hearing officer calculated with respect to the Jamison-Harris sale. But contrary to plaintiff’s contentions, the two incidents are closely related. In both cases, prior to cutting, the price of the timber moved in an amount and direction apparently not foreseen by the parties when they entered the timber contracts. In one instance, prices moved unexpectedly up and in the other unexpectedly down. The fact that Congress bailed out plaintiff when the price of timber went down would seem highly relevant when assessing whether it would be “moral” or “equitable” to mandate the government also to make payments, not legally owed to plaintiff, when the price of timber went up. See Oregon Forest Fire Ass’n v. United States, 170 Ct.Cl. 308 , 316 n. 7, 321 (1965). In a variation of the theme “heads I win/tails you lose,” plaintiff argues that although it won when the price of timber went down, it should also win when the price of timber went up. It would not seem that traditional notions of equity would support such a result.
Thus, when all of the pertinent facts are considered, the United States owes no moral or equitable debt to plaintiff. To the contrary, given the disparity in value be *253 tween the contract rights the government relinquished in plaintiffs favor in the FTCPMA and the contract gain the government achieved here, on balance, it would appear that plaintiff has been treated most generously by both the United States government and the United States taxpayer.