Petitioners Brief — Sherr v. Anaconda Wire & Cable Co.

Supreme Court of the Rnited States

OCTOBER TERM 1945

Moses B. SHerr,

Petitioner,

against

Awnaconpa Wire anp Caste Company and

Unrrep States or AMERICA,

Respondents.

BRIEF IN SUPPORT OF PETITION FOR

CERTIORARI

POINT I

Upon bring a private suit under the False Claims

Statute, the relator acquires, by operation of law, a

property right in the cause of action which is immune

from governmental interference.

1. The qui tam action was “well known in England,

whence we imported it;” Sutherland v. Int’l ins. Co., 43 F.

2d 969, at 970 (C. C. A. 2, 1930); see Marvin v. Trout, 199

U. S. 212, at 225 (1905). Resort to the English authorities

is, therefore, appropriate. They establish that the relator

acquires a vested right upon commencement of suit.

Year Book 1 Henry VII, folio 3 a (Mich. T., Plea 2

[1485]), reports:

“Quand cesti qui voit suir ad un fois son action com-

mence, or est l’action sien, et nemy popularis: car par

14

son suit commence il ad fait accion populer estrange

son propre accion, le quel le Roy, ne nul autre poit

relesser quant a son interest, et le condemnation et

le aequital le party a son suit est barre a touts gens,

et encontre le Roy, et uncore le Roy en touts ceux

eases devant ascun accion commence par estranger,

poit celle pardonner et relesser, et ce sera barre en-

contre touts gens. Quod Nota bene: ear ce divisite

fuit granted, et denie par nulluy.

It is thus the commencement of action, not the recovery

of judgment, which vests one-half of the cause of action in

the qui tam plaintiff. Once the action is begun, not even

the Sovereign can impair the rights of the relator.

The Year Book rule has been consistently followed in

England; Stretton v. Tayler, Cro. Eliz. 138, 78 Eng. Rep.

395; Hammon v. Griffith, Cro. Eliz. 583, 78 Eng. Rep.

826: Dr. Foster’s Case, 11 Coke 65 b, note, 77 Eng. Rep.

1235, note.

It is reaffirmed in 3 Coke Inst. 238:

“After an action popular be brought, tam pro

domino rege, quam pro se ipso, according to any stat-

ute, the king cannot discharge but his own part, and

cannot discharge the informer’s part, because by the

bringing of the action he hath an interest therein; but

before action brought, the king may discharge the

—>

*“Once the person who desires to sue (in a popular, or qui tam

action ) has commenced his action, the action is his and it is no longer

a popular action; for by bringing his suit he has rendered his own

the (theretofore) strange popular action, and neither the King nor

anyone else can release it so far as his interest is concerned ; judgment

for or against the defendant in his action is a bar against the whole

world and even the King; but in all those cases in which a stranger

has not yet commenced an action, the King can forgive and release

the claim and that will constitute a bar against all the world. And

note this well: for this distinction was granted, and it was denied

by no one.” (Parenthetical interpolations added. )

a

15

The 18th century authorities are to the same effect:

4 Blackstone, Commentaries, 399:

“Neither, lastly can the king pardon an offence

against a popular or penal statute, after information

brought; for thereby the informer hath acquired a

private property in his part of the penalty.”

Accord:

Bacon’s Abridgment, verbo “Pardon” (B);

Hawkins, Pleas of the Crown, bk. 2, ch. 26, see. 64

(7th Ed., 1795).

The same rule is sustained by the authority of Lord

Mansfield. In Couch v. Jefferies, 4 Burr. 2460, 98 Eng.

Rep. 290 (1769), a qui tam action had been brought to re-

cover a penalty. After verdict for plaintiff, but before

judgment entered, an Act of Parliament remitted the

penalty. Defendant’s motion to set the verdict aside was

denied :

“Here is a right vested; and it is not to be imagined

that the Legislature could by general words mean to

take it away from the person in whom it was so legally

vested, and who had been at a great deal of cost and

charge in prosecuting. They certainly meant future

actions. Otherwise, it would be punishing the innocent

instead of the guilty. It can never be the true con-

struction of this Act; to take away this vested right

and punish the innocent pursuer of it with costs.”

The decision turned upon an interpretation of the stat-

ute; but it held that the right of the qui tam plaintiff, even

before judgment, is “vested”.

2. These authorities are controlling here. In framing

the False Claims Statute, Congress did not purport to chart

an unknown course. Even the language of the statute:

“as well for himself as for the United States” (R. S.,

16

§3491), is an almost literal adaptation of the “tam pro

domino rege quam pro se ipso” of English usage. By fol-

lowing the English phraseology Congress manifested its

intent to adopt the legal incidents of the English qui tam

action.* Hence it is well understood that the private suit

authorized by the False Claims Statute is the exact equiva-

lent to, and successor of, the English qui tam action; U. 8.

v. Griswold, Fed. Cas. No. 15,266 (D. C. Ore., 1877); see

Pollock v. Steamboat Laura, 5 Fed. 133, at 136 (D. C., 8. D.

N. Y., 1880). )

The “vested right” which, under the English authorities,

the relator acquires in the cause of action upon bringing

suit thereon, has therefore been recognized in this country.

In U. S. v. Griswold, 24 Fed. 361 (D. C. Ore., 1885), aff'd

30 Fed. 762 (C. C. Ore., 1887), a relator, suing under the

False Claims Statute, had recovered judgment of more

than $23,000. Before anything was collected, the Govern-

ment purported to release the claim for $100. The court

refused to give effect to the release: .

“By virtue of the statute prescribing the forfeiture

and damages recovered in this case, and authorizing

any one to sue for them who would, the defendant,

Griswold, became bound to pay the same to the prosecu-

tor herein, the one-half for himself and the other half

for the use of the United States, The law implied a

contract to that effect, and the judgment obtained

thereon is so far the private property of the prosecu-

tor, and cannot be released or satisfied without his

consent, any more than if it had been obtained in a

private action on the bond of the defendant. 3 BI.

Comm. 159. For, although the king might, by a par-

don of the offender, bar or prevent a popular action

before it was commenced, he could not, by this or any

other means known to the law, interfere with tts

prosecution after it was commenced, or release or dis-

* Story, J.. held in Pennock v. Dialogue, 2 Pet. (27 U. S.) 1, at

18 (1829), that “where English statutes—such, for instance, as the

statute of frauds, and the statute of limitations—have been adopted

into our own legislation, the known and settled construction of those

statutes by courts of law has been considered as silently incorporated

into the acts, or has been received with all the weight of authority.”

17

pose of the prosecutor’s interest in the judgment

therein. 6 Bac. Abr. 134; 4 Bl. Comm. 399; Whart.

Crim. PI., $528; 1 Bish. Crim. Law, §§909, 911; U. S.

v. Lancaster, 4 Wash. C. C. 64; Shoop v. Com., 3 Pa.

St. 126; U. S. v. Harris, 1 Abb. (U. S.) 110; Ex parte

Garland, 4 Wall. 381; 2 Hawk. P. C. e. 37, §§34, 54.”

(24 Fed., at 364; italics added)

It is true that the relator in the Griswold case had re-

covered judgment; but the court did not view this fact as

material. The bringing of suit was held to control; in

this the court followed Blackstone whom it cited.

Another outgrowth of the same doctrine is the rule that

commencement of a qui tam action precludes later suit on

the same cause by anyone else. Such was the law in Eng-

land, Hutchinson v. Thomas, 2 Lev. 141, 83 Eng. Rep. 488;

Jackson v. Gisling, Str. 1169, 93 Eng. Rep. 1105; Combe

v. Pitt, 3 Burr. 1423, 97 Eng. Rep. 907; and such it is

here, U. S. v.. Anaconda Wire & Cable Co., 52 F. Supp. 824

(D. C., E. D. Pa., 1948); U. S. ex rel. Benjamin v. Hen-

drick, 52 F. Supp. 60 (D. C., S. D. N. Y., 1943). For the

purpose of this rule “the United States stands * * * just

as does ‘any person’”, U. S. v. Dwight Mfg. Co., 213 Fed.

522, at 524 (D. C. Mass., 1914). Hence, “whichever—the

informer or the district attorney—first commences an ac-

tion for a particular violation of the statute, thereby ex-

cludes the other from so doing”, U. S. v. Griswold, supra,

Fed. Cas. No. 15,266; Commonwealth v. Howard, 13 Mass.

221, at 222 (1816); State v. Bishop, 7 Conn. 181, at 185

(1828); Hawkins, P. C., supra.*

Indeed, so strong is the vested right of the relator in a

qui tam action first commenced, that even a judgment dis-

missing on the merits a second suit, brought by another

on the same cause, does not bar the further prosecution

of the first; Beadleston v. Sprague, 6 Johns. (N. Y.) 101

(1810).

* That the contrary decision in U. S. v. Baker-Lockwood Mfg. Co.,

138 F. 2d 48, at 51-53 (C. C. A. 8, 1643), rev'd on other grounds

sub nom. Nathanson v. U. S., 321 U. S. 746, is questionable was

recognized by the Court below (R. 61).

18

3. The “vested right” in the cause of action against Ana-

eonda which petitioner thus acquired upon bringing this

suit, could not validly be taken by Congress. It is elemen-

tary that “a vested right of action is property in the same

sense in which tangible things are property, and is equally

protected against arbitrary interference”; Pritchard v.

Norton, 106 U.S. 124, at 182 (1882). This Court has recog-

nized “the general rule that it is not consistent with due

process to take away from a private party a right to re-

cover the amount that is due when the act is passed”;

Graham v. Goodcell, 282 U.S. 409, at 426 (1931). This is as

true under the Fifth Amendment, Graham v. Goodcell, supra;

Osborn v. Nicholson, 13 Wall. (80 U.S.) 654, at 662 (1872),

as it is under the Fourteenth, Forbes Pioneer Boat Line v.

Everglades Drainage District, 258 U.S. 338 (1922); Ettor

v. Tacoma, 228 U. S. 148, at 155-6 (1913), and under the

“creat and fundamental principle of a republican govern-

ment”, Wilkinson v. Leland, 2 Pet. (27 U. 8.) 627, at 657-8

(1829).

When Anaconda presented its fraudulent demand to the

United States and collected thereon, it became immediately

obligated to pay the statutory forfeiture and damages.

And when petitioner started this suit, one-half of this

amount became due to him. Under the “general rule” of

Graham v. Goodcell, supra, the 1943 amendment of the

False Claims Statute could not deprive him of that right.

4. Respondents argued below that, before judgment, pe-

titioner’s right is not “vested” because he is “entitled to

receive” his moiety only upon “prosecuting it (the suit)

to final judgment”, R. S., §3493. But this language only in-

dicates that the proceeds of the litigation cannot be divided

before they are recovered. Before judgment and collection

the Government is just as unable as petitioner to receive

any part of the recovery; yet its right is certainly “vested”

rather than “inchoate”. As was said in Robison v. Beall,

26 Ga. 17, at 47 (1858):

19

“The penalty is ‘to be sued for’, ‘on the application

of an informer’. Of course, then, the right to sue for

the penalty and, by the suit, to recover the penalty, is

to vest in the informer. True, the Act says that the

money, ‘when recovered’, is to be paid, one-half to the

State, and the other half to the informer; but this is

not saying that the right to these halves, respectively,

is not to vest before the recovery. The time when

money is to be paid is no test of the time when the

right to the money vests. Debitum in presenti, solven-

dum in futuro, is a common case. Suppose this penalty

paid after suit, but before recovery, would not the

moe eg be entitled to one-half of it? Surely he

would.”

5. Respondents also claimed that this suit is for a

“penalty” which, until judgment, may be defeated by the

repeal of the penalty statute; Norris v. Crocker, 13 How.

(54 U. S.) 429, at 440 (1851); Pope v. Lewis, 4 Ala. 487

(1842). But this rule, assuming it to be applicable to qui

tam actions, does not aid respondents. In the first place,

the False Claims Statute is not a “penalty” law. Double

damages, such as those allowed by R. 8., $3490, are no pen-

alty; see Overnight Motor Transp. Co. v. Missel, 316 U. 8S.

572, at 583-4 (1942). The “device of double damages plus

a specific sum” in the False Claims Statute was chosen

to make the Government whole, not to punish the wrong-

doer, U. S. ex rel. Marcus v. Hess, 317 U. S. 537, at 551-2

(1943). A right to “damages” is property and is pro-

tected by the Constitution, even before judgment has been

recovered thereon, Angle v. Chicago etc. R. Co., 151 U.S.

1, at 19 (1894); and this is true even where the right to

damages is created by statute, Ettor v. Tacoma, 228 U. 8.

148 (1913).

Secondly, even if this were a penalty suit, the 1943

amendment did not “repeal” the penalty, but reconveyed it

to the Government. The Court below recognized (R. 61)

that the rule of Norris v. Crocker, supra, applicable only

to repeals, does not support such reconveyance. A penalty

suit falls with the repeal of the statute* because of “the

* But see R. S., §13, 1 U.S. C., §29.

20

injustice of punishing a man for an act which the law no

longer considers a crime”, Bank of St. Mary’s v. Georgia,

12 Ga. 475, at 482 (1853). In the present case the “penal”

policy of the United States has not changed; Anaconda is

still liable for forfeitures and double damages. What did

change is the Government’s willingness to share the re-

covery with petitioner. But such change of mind is not

authorized by any precedent. Even an attempt by Con-

gress to release an informer’s share in a penalty, while

retaining the Government’s own share, has been con-

demned, M’Lane v. U. S., 6 Pet. (31 U. 8.) 404, at 426-8

(1832); the Government’s appropriation of petitioner's

share must fail a fortiori.

POINT II

Petitioner also has a contract right against the United

States to prosecute this suit to judgment and to collect

his share of the recovery.

If it were assumed, for argument, that the pre-1943

False Claims Statute should be construed in vacuo, with-

out regard to the precedents in England and in this coun-

try, petitioner would still have a contract right inviolable

under the Constitution.

1. If a private party were to invite another, in terms

comparable to those of the False Claims Statute, to bring

an action on his behalf, the institution of such suit would

create a binding contract. Suppose that A, a victim of

fraud, says to B: “You may bring an action upon my

claim, as well for yourself as for me; if you do, you shall

bear all costs and you shall not discontinue without my

written consent; if you recover judgment, one-half of all

amounts collected is yours.” If B responds by bringing

the action, a contract results which A cannot lawfully re-

pudiate.

It is true that B has earned his share only if he suc-

ceeds and collects. But the formation of a valid contract

21

is not postponed until then. For B, by bringing the suit,

agrees not to discontinue it and to bear the costs. A bind-

ing contract arises therefore at once; and the procurement

of a judgment is merely the performance of B’s under-

taking, but not a condition for the formation of the con-

tract. Williston, Contracts (Rev. Ed., 1936), Vol I, §60,

p. 166; Restatement, Contracts, §31; Wood v. Duff-Gordon,

222 N. Y. 88, at 91 (1917).*

Nor is the legal effect of A’s offer changed if it is ad-

dressed to the public at large. “General offers” are well

recognized ; Restatement, Contracts, §28; Wuliston, supra,

§32, pp. 77 et seq. The contract is made with the first

person accepting the offer, Williston, supra, p. 78.

2. The legal implications of the transaction are the same

if A is the Government of the United States, speaking

through a statute.

“Tt has become the established law that a legislative

enactment, in the ordinary form of a statute, may con-

tain provisions which, when accepted as the basis of

action by individuals or corporations, become con-

tracts between them and the state * * *” (12 Am.

Jur., Const. L., §406, p. 37, citing cases).

In determining the presence of a contract the language of

the statute is entitled to “practical, common-sense con-

struction”, Russell v. Sebastian, 233 U. S. 195, at 205

(1914).

The False Claims Statute employs language which, if

used by a private party, would amount to the offer of a

contract. That the offer was made in the solemn form

of a statute duly enacted by Congress does not render it

any less obligatory. The offer, like that of a private

* Even if A’s offer were only for a “unilateral contract” and hence

could be “accepted” only by full performance on the part of B, the

offer would become irrevocable when B, by commencing suit, incurs

labor, expense and liability for costs; Restatement, Contracts, §§45,

9); Williston, supra, S60A, p. 170.

22

party, can be accepted and made irrevocable by bringing

suit.

Russell v. Sebastian, supra, 233 U. S. 195, illustrates the

rule. The California Constitution had authorized “any

individual or any company” to lay gas or water pipes in

the public streets of any city having no public water or

gas works (p. 198). Despite “the generality of the provi-

sion. with respect to all persons and cities”, it was held to

constitute the offer by the state of a contract (p. 203);

the commencement of the laying of pipes by a company

constituted “acceptance in fact” (p. 203), since the com-

pany had thereby “changed its position beyond recall” (p.

208); and the resulting contract (p. 204) was held to

survive the repeal of the constitutional provision. Even

after the repeal the company was held to have the con-

tract right further to expand its system (p. 208). For

since it could not discontinue its services and was, in fact,

obligated to meet all reasonable requirements of the com-

munity, it had the “correlative” “right to serve”, includ-

ing the “privilege to install the means of service” (pp.

208-9).

The False Claims Statute was similarly addressed to

“any person” (R.S., §3491). Institution of suit by peti-

tioner constituted “acceptance in fact” of the statutory

offer; for it involved petitioner in expense, labor and lia-

bility for costs (R. S., 43493), thereby “changing his posi-

tion beyond recall.” And since petitioner is obligated not

to discontinue (R. S., §3491), he must have the “correla-

tive right” to prosecute his suit to judgment and collection.

3. Other considerations forcefully support the contrac-

tual character of the relation. The False Claims Statute

is not just a law dictated by public policy and the gen-

eral good. The Government, if defrauded, is in a position

little different from that of a private claimant. It has

a monetary interest of its own. By inviting another to

sue on its behalf and to split the proceeds, it descends -

from its pedestal as lawmaker to the arena of the bar-

23

gaining individuals. “You sue for me, and you shall have

half of the recovery”: This is the language and the proper

subject-matter of contract, even if embodied in a statute.

4, It is true that Judge Clark, in his concurring opinion

below (R. 62), could “see no contract in any real sense

between the relator and the sovereign, only a method of

law-enforcement by private individuals under the stimulus

of a reward for successful accomplishment, but with noth-

ing to prevent the sovereign from resuming enforcement

itself before the reward has been earned”.

But this reasoning would seem less than convincing. To

say that there is “no contract in any real sense” falls short

of showing why there is not. And to say that the statute

provides a “method of law-enforcement” is not inconsist-

ent with the existence of a contract made for that very

purpose. But Judge Clark’s opinion steps on really dan-

gerous ground in holding that the reward, although held

out as a “stimulus” to invite action, may be withdrawn at

any time before it is “earned”. Such a rule would make

the statute a trap and a snare for those who trustingly,

upon the Government’s invitation, incur expense, labor and

liability for costs, only to find themselves ultimately ousted

by the Government’s “resuming enforcement itself.” To

find that Congress sanctioned a rule of so immoral opera-

tion would require clearer support in the statute than its

language affords. And it need hardly be added that Judge

Clark’s opinion does not touch our primary contention

that, regardless of any contract, petitioner has by opera-

tion of law a vested property right in the cause of action

(supra, Point IT).

5. If petitioner has a contract right against the United

States, the Fifth Amendment protects it against Govern-

mental interference, whether by Congress or by the Execu-

tive; Lynch v. U. S., 292 U. S. 571, at 579 (1934):

“Rights against the United States arising out of a

contract with it are protected by the Fifth Amend-

PRBS. EACLE Y ELISE AIS YT REILLY GOI ILE I ITIL LOE BEEN NS IOS EN A ALIN FE ENP,

Xe Maes

24

ment. When the United States enters into contract

relations, its rights and duties therein are governed

generally by the law applicable to contracts between

private individuals.”

Aceord: Perry v. U. S., 294 U. 8. 330, at 350-3 (1935).

6. But respondents contended below that petitioner’s

contract right, if any, was at most an agency and could be

terminated by the Government at its will, subject only to

petitioner’s right to damages or quantum meruit; Restate-

ment, Agency, §§118, 455. Respondents deduced that peti-

tioner, whatever his rights against the Government, can

no longer prosecute this action.

But petitioner is not the Government’s agent. An agent

is “a person authorized by another to act on his account

and under his control”; Restatement, Agency, §1, Comment

(d). Under the False Claims Statute petitioner acted

neither on account of the Government nor under its con-

trol. The statute expressly provided that petitioner was

to sue “as well for himself as for the United States”, R. S.,

§3491. To the extent that he sued “for himself”, he acted

for his own account. Nor was petitioner under the Govern-

ment’s control; for under the False Claims Statute the re-

lator has the “sole control” of his suit, except upon dis-

continuance; Bush v. U. S., 13 Fed. 625, at 629 (C. C., Ore.,

1882); U. S. v. Griswold, Fed. Cas. No. 15266( D. C., Ore.,

1877); letter of the Attorney General of July 31, 1943,

Cong. Rec., supra, p. 7612, col. 1. The absence of the two

essential elements thus negates an agency relation. The

facts that the Government is not a party to the action,

Winne v. Snow, 19 Fed. 507 at 508 (D. C., S. D. N. Y., 1884),

and that petitioner cannot recoup his expenses from the

Government, R. S., §§3491, 3493, fortify this conclusion.

Petitioner, we submit, is the assignee ex lege of the Gov-

ernment’s claim, subject to a trust of one-half in favor of the

Government; Caswell y. Allen, 10 Johns. (N. Y.) U8

(1813). The major distinctions hetween trust and agency

—

25

are the trustee’s title to the trust property, his freedom

from control by the cestui and his inability to subject the

beneficiary to personal liability; Restatement, Trusts, §8,

Comments (a), (b) and (¢). All of the salient features

of the False Claims Statute—petitioner’s “property in his

part of the penalty” (4 Blackstone Comm. 399), his “sole

control” of the litigation, his position as the sole party

plaintiff, his right to recover and collect the statutory

damages, forfeiture and costs, his inability to subject the

Giovernment to liability for costs—compel the conclusion

that, upon commencement of suit, the cause of action is

transferred to him, one-half in his own right, the other

half in trust for the Government.

But if the relation should be agency, it is coupled with

an interest and therefore irrevocable; Hunt v. Rousmanier,

8 Wheat. (21 U. 8.) 174 (1823). The very reasons mili-

tating for an assignment indicate at least that the relator

“by the bringing of the action hath an interest therein”

(3 Coke Inst. 238) sufficient to render the power irrevo-

cable; Restatement, Agency, §§138, 139; and compare Illus-

trations 1 and 2 of $138.

POINT Ill

Denial of federal jurisdiction by the 1943 amendment

of the False Claims Statute is tantamount to the destruc-

tion of petitioner’s right itself.

The 1943 amendment purports to affect only the juris-

diction of the district courts which Congress has undis-

puted power to regulate, Constitution, Art. III, $1; Lock-

erty v. Phillips, 319 U. S. 182, at 187-8 (1943). But if

petitioner cannot sue in the district courts he cannot

sue anywhere. R. 8., §3490, provides that the “forfeiture

and damages shall be sued for in the same suit”. And

with respect to “all suits for penalties and forfeitures in-

curred under the laws of the United States”, federal juris-

diction is “exclusive of the courts of the several States”;

LISSA NAN ENTE EAS PARE MEL NE ANN LILLE LE LE LIE II ELE ILENE SLE IERIE IE IL ER

a

26

§256 (2) of the Judicial Code, 28 U. S. C., §871 (2). The

abolition of the jurisdiction of the district courts by the

1943 amendment thus leaves petitioner altogether without

remedy.

Petitioner’s vested right, protected as it is by the Fifth

Amendment, cannot be taken by indirection through the

complete destruction of the remedy. This is true under

the contract clause of the Constitution; W. B. Worthen

Co. v. Kavanaugh, 295 U. S. 56, at 60 (1935) ; Richmond

M. & L. Co. v. Wachovia B. & T. Co., 300 U. S. 124, at 128-9

(1937). It is equally true under the due process clauses

of the Fourteenth Amendment, Brinkerhoff-Faris T. € 8.

Co. v. Hill, 281 U. S. 673, at 679 (1930); Ettor v. Tacoma,

998 U. S. 148, at 155-6 (1913), and of the Fifth Amend-

ment, Graham v. Goodcell, 282 U. S. 409, at 430-1 (1931).

POINT IV

The 1943 amendment of the False Claims Statute can-

not be sustained on the ground that petitioner may sue

for compensation in the Court of Claims.

The Court below assumed, without deciding, that peti-

tioner had a vested right in the cause of action against

Anaconda, and that the 1943 amendment effected a “taking”

of that right. But the Court held that the taking was not

without due process of law. For by its power of eminent

domain Congress could, under the Fifth Amendment, take

petitioner’s property for just compensation. The compen-

sation did not have to be paid in advance of the taking,

provided that petitioner was afforded a plain and adequate

remedy; Yearsley v. Ross Construction Co., 309 U. S. 18,

at 21 (1940); Hurley v. Kincaid, 285 U. S. 95, at 104

(1932). According to the Cireuit Court petitioner was

given such a remedy; for by taking his property the Gov-

ernment impliedly contracted to pay him just compensa-

tion; U. S. v. Lynah, 188 U. S. 445, at 462, 464, 465 (1903);

27

and $145 (1) of the Judicial Code, 28 U. S. C., §250,*

permits petitioner to enforce the implied contract in the

Court of Claims (R. 62).

We submit that the Circuit Court erred on two counts.

A

Congress made no contract to compensate petitioner for

the taking of his property

Under the Court of Claims Act, 28 U. S. C., $250 (1),

as under the similar Tucker Act, 28 U. S. C., §41 (20),

petitioner can sue the United States for compensation

only if his claim arises upon a “contract, express or im-

plied, with the Government of the United States”. In the

absence of a contract the United States is immune from

suit, even though petitioner’s claim for the taking of his

property be “founded upon the Constitution” or be one

“for damages, liquidated or unliquidated”; Schillinger v.

U. S., 155 U. S. 162, at 168-71 (1894); Basso v. U. S., 239

U. S. 602 (1916).

To sue the United States in the Court of Claims peti-

tioner would have to rely upon “the contract implied in

fact which, in view of the constitutional obligation justly

to compensate for property taken by eminent domain, ordi-

narily arises on a taking of private property by the gov-

ernment pursuant to law”; Marion € Rye V. R. Co. v.

U. S., 270 U. S. 280, at 283 (1926). But the Government,

as will presently be seen, made no implied contract with

* That section, as far as pertinent, provides :

“The Court of Claims shall have jurisdiction to hear and de-

termine the following matters :

(1) Claims against United States. First. All claims (except

for pensions) founded upon the Constitution of the United States

or any law of Congress, upon any regulation of an executive

department, upon any contract, express or implied, with the Gov-

ernment of the United States, or for damages, liquidated or

unliquidated, in cases not sounding in tort, in respect of which

claims the party would be entitled to redress against the United

States either in a court of law, equity or admiralty if the United

States were suable: Provided, * * *.”

28

petitioner to’ pay him compensation for the taking of his

property. )

1. Not every governmental taking of property raises the

implied contract to pay compensation. The conditions are

stated in U. S. v. Lynah, supra, 188 U. S., at 465:

“Whenever in the exercise of its governmental

rights (the Government) takes property the owner-

ship of which it concedes to be in an individual, it

impliedly promises to pay therefor.” (Italics sup-

plied.)

The language here italicized reflects law well settled;

Alabama v. U. S., 282 U. S. 502, at 507 (1931); U. S. v.

North American Transp, € Trad. Co., 253 U. 8. 330, at

333 (1920); U. S. v. Great Falls Mfg. Co., 112 U. S. 645,

at 656 (1884). The rule was clearly stated in Tempel v.

U. S., 248 U.S. 121, at 130 (1918):

“But in the case at bar both the pleadings and the

facts found precluded the implication of a promise to

pay. For the property applied for the public use is

not and was not conceded to be in the plaintiff. * * °

The law cannot imply a promise by the Government

to pay for a right over, or interest in, land, which

right or interest the Government claimed and claims

it possessed before it utilized the same. If the Gov-

ernment’s claim is unfounded, a property right of

plaintiff was violated; but the cause of action there-

for, if any, is one sounding in tort; and for such the

Tucker Act affords no remedy.”

The rule is founded in common sense. Where the

Government concedes that the property taken belongs to

another, it may be presumed to act under its power

of eminent domain; and that power may constitutionally

be exercised only upon payment of “just compensation”.

But the requirement of just compensation is inapplicable

where the Government predicates its action on some other

right or power. To imply in such case a contract to com-

pensate would be the barest fiction, would impute to the

Government an intent to expropriate where it does not

even know that it is taking private property, and would

29

in effect nullify the statutory limitations of the jurisdic-

tion of the Court of Claims.

2. Here not even the Court below “conceded” that peti-

tioner had any property right; much less did Congress.

The Committee Reports and the voluminous Congressional

debates (supra, p. 5) suggest not the faintest awareness

of Congress, much less a “concession”, that the relators

in the suits then pending had vested rights. No consti-

tutional question was ever raised. Congress, it may be

inferred, simply assumed that its right to regulate the

jurisdiction of the district courts (Constitution, Art. III,

$1) sustained the amendment. Such was also the position

of the Attorney General who sponsored the amendment;

witness the briefs submitted by his office in this case,

which deny that petitioner has any vested or property

right in the claim against Anaconda. On this theory Con-

gress would indeed have been free to terminate all pend-

ing actions, without need to fall back on its power of emi-

nent domain.

To sue in the Court of Claims petitioner would have

to plead and prove affirmatively that Congress, when

enacting the 1943 amendment, “conceded” that he had a

vested right; Pearson v. U. S., 267 U.S. 423, at 427 (1925).

But from the known facts no such “concession” by Con-

gress can be gathered. Congress intended to eliminate

what it thought was merely a hope or expectation of

reward. If it turns out that petitioner had a vested or

property right, the Government cannot be made a con-

demnor thereof in tinvitum. The taking of petitioner's

property is ineffective because it violates due process of

law; and it cannot be cured by invoking the right of emi-

nent domain which Congress did not intend to exercise

and the price of which it did not intend to pay.

3. This conclusion is sustained by additional grounds.

The contract upon which suit may be brought in the Court

of Claims “must be an actual one and, if implied, must

be implied in fact, not merely implied by fiction, or as it

is said, by law”; Alabama y. U. S., supra, 282 U.S., at 506.

30

“The circumstances”, it has been held, “may be such as

to clearly rebut the existence of an implied contract”;

Klebe v. U. S., 263 U. S. 188, at 191 (1923); Atwater &

Co. v. U. S., 275 U. S. 188, at 191 (1927). More particu-

larly, the implication of a contract will be deemed rebutted

where the Government, upon taking the property, states

that it will not pay therefor; Ball Engineering Co. v. White

& Co., 250 U. S. 46, at 57 (1919) ; Mullen Benev. Co. v. U.S.,

290 U. S. 89, at 95 (1933).

The 1943 amendment of the False Claims Statute was

designed to eliminate or reduce the compensation of the

qui tam plaintiffs. Those who, like petitioner, brought

their suits without original information are to receive

nothing. Congress so provided by terminating their suits

(R. S., §3491C, as amended) and repealing R. S., $3493.

An enactment designed to take compensation away cannot

be construed as an implied promise to pay it nevertheless.

Even if Congress had contracted to compensate peti-

tioner, the taking of his property was invalid since it

was not “for public use”

Assuming, for argument’s sake, that Congress, in ter-

minating this action, promised to compensate petitioner,

the attempted exercise of eminent domain must fail because

petitioner’s property was not taken for public use. That

a taking for private use is unauthorized, even though com-

pensation be provided, appears from the clear language

of the Fifth Amendment and is well settled; Missouri Pac.

R. Co. v. Nebraska, 164 U. S. 403, at 416-7 (1896) ; U. 8.

v. Certain Lands, 78 F. 2d 684, at 686 (C. C. A. 6, 1935),

cert. dism. 297 U. S. 726. And it is equally well settled

that “the nature of a use, whether public or private, is

ultimately a judicial question”; Rindge Co. v. Los Angeles,

262 U. S. 700, at 705 (1923).

If the 1943 amendment of the False Claims Statute were

permitted to stand, petitioner’s share would flow into the

general treasury of the United States. While it would

31

thus become public property, it would not be put to a

“public use” within the meaning of the Fifth Amendment.

The sole purpose and effect of appropriating private

property into the public treasury would be to enrich the

treasury. But that is the function of taxation. The mere

enrichment of the treasury can never justify the exercise

of eminent domain; nor can it be accomplished by this

power; for whatever would flow by this means into the

treasury would have to be paid out again as. “just com-

pensation”. The “public use” envisaged by the Fifth

Amendment must be a use for a specific and well defined

purpose. Otherwise every taking of private property

could be sustained on the mere ground that the Govern-

ment is the recipient; and the limitations which the words

“for public use” place upon the power of eminent domain

would go into the discard.

It might be said that the 1943 amendment was designed

not only to put the relators’ shares in pending qui tam

actions in the public treasury, but also to prevent over-

zealous informers from embarrassing criminal proceedings

brought by the Government (Cong. Rec., 78th Cong., Ist

Sess., p. 7572; Sen. Rep. No. 291, Part 1). But the pre-

vention of an existing abuse is no substitute for the con-

stitutional requirement that the property taken by emi-

nent domain must be designed for “public use”. It is the

character of the use to which the property is to be put

after its taking which must determine whether or not

it was taken for public use. This does not mean that

Congress was powerless to prevent the mischievous inter-

ference by private suits with criminal prosecutions. But

the means was to place appropriate procedural curbs upon

those suits (such as a stay until termination of the criminal

suits); the chose in action itself could not be taken away

under any of the powers conferred upon Congress by the

Constitution.

Respectfully submitted,

Moses B. SHeErr,

Petitioner pro se.

as