Opposition Brief — Shockley v. United States

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CITATIONS

Cases:

Farm Security Administration v. Herren, 165 F. 2d 554,

certiorari denied, 333 U. 8. 875.....................

Federal Housing Administration v. Burr, 309 U. S. 242. .

Franklin v. United States, 308 U. 8. 516................

Keifer d Keifer v. Reconstruction Finance Corporation,

DEPT 2 Sb A ous Caachi bene bea weied na eens

Klepinger v. Rhodes, 140 F. 2d 697, certiorari denied, 322

ME Pee oe CUENG Lhe iambet cule dawe meee cies

Matlaw Corporation v. War Damage Corporation, 164

F, 2d 281, certiorari denied, 333 U. S. 863............

Merchant Fleet Corporation v. Harwood, 281 U.S. 519.

Minnesota v. United States, 305 U. 8. 382...............

Olson v. United States Spruce Products Corporation,

NSS a Oe roo

Otis Elevator Company v. United States, 18 F. Supp.

BATE SAR pi Ee any op ee

EE 6 iro er RA sede ey nid alan KR Bad we aa wkd

Ridgley v. United States, 45 A. 24475 .................

Rowe v. Nolan Finance Company, 142 F. 2d 93.........

Sloan Shipyards v. U. S. Fleet Corporation, 258 U. S.

549 TE GN RAS Ue DISA ANGaS Gs ah age ad REN ade abe ee

United States v. Jones,131U.S.1............. Pleats

United States v. Shaw, 309 U. 8. 495..................

United States v. Sheriff Motor Co., 63 F. Supp. 685

United States v. Sherwood, 312 U. S. 584

United States v. Turner, 47 F. 2d 86...................

United States v. Weisenbloom, 168 F. 2d 698

Wittek v. United States, 54 A. 2d 747

Statutes :

Act of February 17, 1909, 35 Stat. 623, Ch. 134.........

Act of March 3, 1921, 41 Stat. 1310, Ch. 125, See. 1.....

Act of March 27, 1942, 56 Stat. 174, 175

(1)

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CoNNXNoonrtnt ao worn

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Statutes—Continued Page

Act of June 30, 1947, 61 Stat. 202, 15 U.S.C. 603 3

Municipal Court Act of 1942, Sec. 4, 56 Stat. 190, 192,

District of Columbia Code, See. 11-755 2,5

Reconstruction Finance Corporation Act (Act of January

22, 1932, ¢. 8, 47 Stat. 5, as amended by the Act of June

19, 1934, 48 Stat. 1105, 1108 and by the Act of June

10, 1941, 55 Stat. en

See. 4

See. 5(d)

28 U.S. C. 1331 -)

28 U.S.C. 1346 (formerly ‘See. 24 (20) of the ‘Judicial

Code) .

District of Columbia Code, See. 11-305

District of Columbia Code, See. 11-306

aww

coauw

Miscellaneous :

7 Fed. Reg. 2531-2532 cede a

—

Ynthe Supreme Court of the Winited States

OcrToBER TERM, 1948

No. 492

RussELL R. KNOWLES AND SYLv1A KNOWLES, ET AL.,

PETITIONERS

v.

War DaMaGE CorPORATION, AN INSTRUMENTALITY

OF THE Unirep STaTEs OF AMERICA

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE DISTRICT OF

COLUMBIA CIRCUIT

BRIEF FOR RESPONDENT IN OPPOSITION

OPINIONS BELOW

The United States District Court for the Dis-

trict of Columbia did not render an opinion.

The opinion of the United States Court of Appeals

for the District of Columbia (R. 34-39) has not yet

been reported.

JURISDICTION

The judgment of the Court of Appeals was en-

tered on October 4, 1948 (R. 40). The petition for

writ of certiorari was filed on December, 31 1948.

The jurisdiction of this Court is invoked under

28 U.S.C. 1254.

(1)

—

2

QUESTION PRESENTED

Whether the courts below erred in holding that

this action, involving admittedly less than $3,000,

brought against a subsidiary of the Reconstruction

Finance Corporation empowered to ‘‘sue and be

sued in any court of competent jurisdiction’’, lay

within the exclusive jurisdiction of the Municipal

Court for the District of Columbia.

STATUTE INVOLVED

Section 4 of the Municipal Court Act of 1942,

56 Stat. 190, 192 (See. 11-755 of the District of

Columbia Code) provides in part:

(a) The Municipal Court for the District of

Yolumbia, * * * shall have exclusive juris-

diction of civil actions, including counter-

claims and crossclaims, in which the claimed

value of personal property or the debt or dam-

age claimed, exclusive of interest, attorneys’

fees, protest fees, and costs, does not exceed

the sum of $3,000 * * *.

STATEMENT

The respondent, War Damage Corporation,’ was

created on December 13, 1941 (7 Fed. Reg. 2531) by

the Reconstruction Finance Corporation pursuant

to Section 5d of the Reconstruction Finance Cor-

poration Act. (Act of January 22, 1932, ¢. 8, 47

Stat. 5, as amended by the Act of June 19, 1934, 48

Stat. 1105, 1108 and by the Act of June 10, 1941, 55

' Originally it was called the “War Insurance Corporation”.

7 Fed. Reg. 2531. By amendment to its charter its name was

changed on March 30, 1942 to “War Damage Corporation”

7 Fed. Reg. 2531-2532.

3

Stat. 248, 249). Its purpose as expressed in its char-

ter was to provide insurance against damage to

property through enemy attack. Its charter pro-

vided that it should have power ‘‘to sue and be sued

in any court of competent jurisdiction’’ and that it

should ‘‘in all other respects be possessed of the

privileges and immunities that are conferred upon

the Reconstruction Finance Corporation under

the Reconstruction Finance Corporation Act, as

amended.’”’? Its authorized capital stock was

$100,000,000 all of which was subseribed for by

the Reconstruction Finance Corporation and was

not transferable. 7 Fed. Reg. 2531.

Respondent provided insurance without compen-

sation until July 1, 1942 when payment of an an-

nual premium was required. 56 Stat. 175. On

July 20, 1942, on payment of a $9 premium, respond-

ent issued a policy to petitioners covering their

home and automobile (R. 27-29).

This action was instituted in the United States

District Court for the District of Columbia by

petitioners ‘‘on their own behalf * * * and on

behalf of all others similarly situated’”’ (R. 2). The

complaint alleged that ‘‘The matter in controversy

arises under the Laws of the United States, is a suit

against a corporation organized under an Act of

2The Reconstruction Finance Corporation has power “to

sue and be sued, to complain and to defend, in any court

of competent jurisdiction, State or Federal.” Act of January

22, 1932, Sec. 4, 47 Stat. 6; Act of June 30, 1947, 61 Stat. 202,

15 U. 8. C. 603.

8 There is no allegation that a second premium was ever paid.

4

Congress, and jurisdiction is also vested in this

Court by paragraphs 301 and 306 of Title 11 of the

Code of Laws of the District of Columbia’”’ (R. 2-3).

It further alleged that the respondent has in its

possession ‘‘sums of money amounting to $300,000,-

000 more or less which, under the insurance pro-

gram * * * are the equitable property of the

plaintiffs and of all other holders of policies issued

by the defendant, in the nature of refundable un-

earned excess premiums’’ (R. 6). It prayed the

court to enjoin the respondent from paying into

the United States Treasury any of the surplus in

its possession ; to require an accounting ; to impress

a trust upon these funds for the pro rata benefit of

all policyholders ; to reform the insurance policies;

and to direct the payment of the surplus funds,

after deduction of necessary costs and expenses, to

the policyholders in proportion to their interests

(R. 7-8). Petitioners’ insurance contract attached

to the complaint showed that their interest was not

more than $18 (R. 27-31).

On motion of the respondent made on the ground,

among others, of lack of the requisite jurisdictional

amount, the complaint was dismissed (R. 33). On

appeal, the court below affirmed the judgment of

the district court (R. 40). It held that petitioners

could not aggregate their claims with those simi-

larly situated to meet the jurisdictional minimum

of $3,000 required for suit in the District Court and

5

that, by statute, exclusive jurisdiction lay with the

Municipal Court. (R. 35-38)

ARGUMENT

Since 1909, the Municipal Court for the District

of Columbia has enjoyed exclusive jurisdiction of

certain classes of cases (Act of February 17, 1909,

35 Stat. 623, ch. 134; Act of March 3, 1921, 41 Stat.

1310, ch. 125, see. 1). Most recently that jurisdic-

tion has been enlarged by Section 4 of the Municipal

Court Act of 1942 (56 Stat. 192, Sec. 11-755 of the

District of Columbia Code) to include all ‘‘civil ac-

tions * * * in which the claimed value of personal

property or the debt or damages claimed, exclusive

of interest, attorneys’ fees, protest fees, and costs,

does not exceed the sum of $3,000.’’ Both courts be-

low held, correctly we submit, that this action in-

volving as it does at most the sum of $18 lay within

the exclusive jurisdiction of the Municipal Court

and therefore outside that of the District Court.

Petitioners’ argument to the contrary is that this

is a suit against the United States; that the United

States District Court for the District of Columbia

like the other district courts enjoys concurrent

jurisdiction with the Court of Claims under the

Tucker Act of suits against the United States; *

428 U.S. C. 1346 (a) (2) formerly Section 24 (20) of the

Judicial Code provides that (a) “The district courts shall

have original jurisdiction, concurrent with the Court of Claims,

of: * * * (2) Any other civil action or claim against the

United States, not exceeding $10,000 in amount, founded either

upon the Constitution, or any Act of Congress, or any regu-

—

6

and that consequently the District Court had juris-

diction of this suit under that Act (Pet. pp. 7-9).

The fallacy in petitioners’ argument lies in the

assumption that all suits which affect the interests

of the United States necessarily proceed under the

Tucker Act. Sovereign immunity to suit may he

waived by Congress, either (1) by statute, as in

the Tucker Act, which authorizes direct suit against

the United States, or (2) by providing for the con-

duct of government business by corporate agents,

such as respondent, not endowed with the Govern-

ment’s immunity and thus amenable to suit. United

States v. Shaw, 309 U.S. 495, 501; Keifer & Keifer

v. R. F. C., 306 U. 8. 381. Suits against govern-

mental corporations authorized ‘‘to sue and be

sued’’ are not considered suits against the United

States. Olson v. United States Spruce Prod. Corp.,

267 U.S. 462; Sloan Shipyards v. U. S. Fleet Cor-

poration, 258 U. 8. 549; Merchant Fleet Corp. v.

Harwood, 281 U. 8. 519. Even in the absence of

statute, suit may be brought against such corpora-

tions in State courts, (Sloan Shipyards v. U. 8S.

Fleet Corp., supra; Olson v. United States, supra)

for tort (Keifer & Keifer v. R. F. C., supra, at pp.

lation of an executive department, or upon any expressed or

implied contract with the United States, or for liquidated or

unliquidated damages in cases not sounding in tort.” The

District Court of the United States for the District of

Columbia has the same powers and jurisdiction as the Dis-

trict Courts of the United States. See 11-305, District of

Columbia Code.

7

394-397), and costs thereon allowed (R. F. C. v.

Menthan Corp., 312 U.S. 81).

The complaint in the instant case is addressed to

the liberal rules which applies to suits against cor-

porate agents and not to the limited consent given

by the Tucker Act to suits against the United States.

If this action were brought under the Tucker Act,

petitioners could not secure the relief for which

they pray since equitable decrees such as are sought

here lie outside the jurisdiction of the courts under

that Act. United States v. Sherwood, 312 U. S.

584, 588 ; United States v. Jones, 131 U.S. 1; United

States v. Turner, 47 F. 2d 86 (C. A. 8). Nor is it

clear that the complaint states a cause of action on

a contract of the United States, express or implied

in fact, a prerequisite for a Tucker Act suit. Cf.

U.S.v. Algoma Lumber Co., 305 U. 8. 415, 419, 423 ;

Farm Sec. Adm. v. Herren, 165 F. 2d 554, 562, 564-

565 (C. A. 8), certiorari denied, 333 U. S. 875.

Moreover, since the complaint on its face asks for

disposition of a sum well in excess of the $10,000

maximum fixed by the Act, it probably lies outside

the jurisdiction of the district court. Cf. United

States v. Sherwood, supra; Franklin v. United

States, 308 U. S. 516; Otis Elevator Co. v. United

States, 18 F. Supp. 87 (S. D. N. Y.). Finally, since

the Tucker Act authorizes suit only in the district

courts (cf. Minnesota v. United States, 305 U. S.

382, 388), the Municipal Court would not have even

a

8

the concurrent jurisdiction which petitioners un-

questioningly assume. (Pet. 5, 11.)

Petitioners’ ability to proceed free from the

limitations of the Tucker Act derives from the fact

that respondent is specifically authorized ‘‘to sue

and be sued.’’ But while a governmental agency

endowed with such authority ‘‘is not less amenable

to judicial process than a private enterprise under

like circumstances would be,’’ it is not more so.

F. H. A. v. Burr, 309 U. 8. 242, 245, 250; Matlaw

Corp. Vv. War Damage Corp., 164 F. 2d 281 (C. A.7),

certiorari denied, 333 U. S. 863. Having elected

to proceed against a governmental corporation as

though it were a private enterprise, petitioners

must accept the limitations inherent in the remedy

they have elected. Since the district court clearly

lacks jurisdiction in actions against private enter-

prises involving less than $3,000, the suit was

properly dismissed. Klepinger v. Rhodes, 140 F.

2d 697 (C. A. D. C.), certiorari denied, 322 U. S.

734; Rowe v. Nolan Finance Co., 142 F. 2d 93

(C. A. D. C.).

The provision of the Judicial Code (28 U.S. C.

1331) which prescribes the same jurisdictional

minimum for the district courts, would equally com-

pel this result. Indeed, the Court of Appeals for

the Seventh Circuit has affirmed a judgment dis-

missing for failure to meet the $3,000 minimum an

action against respondent in all respect identical

9

to this one. Matlaw Corp. v. War Damage Corp.,

164 F. 2d 281, certiorari denied, 333 U. S. 863.°

CONCLUSION

The petition for certiorari should be denied.

Respectfully submitted,

Vv Puiu B. PERLMAN,

/ Solicitor General.

H. G. Morison,

Assistant Attorney General.

4, PauL A. SWEENEY,

eo Epwarp H. Hickey,

CeceLia H. Goetz,

Attorneys.

JANUARY 1949.

5 As a subsidiary ground for granting certiorari, petitioners

assert a conflict between the decision below and United States

v. Sheriff Motor Co., 63 F. Supp. 685 (D. D. C.) (Pet. 9-11).

There the court sustained the right of the United States to

bring an action for less than $3,000 in the district court be-

cause of the special statutory language giving that court cog-

nizance of all actions “in which the United States shall be

plaintiffs or complainants.” Sec. 11-306 Dist. of Col. Code.

Since in this action the United States is neither plaintiff nor

complainant,the lack of relevance of this decision and of others

like it is clear. Ridgley v. United States, 45 A. 2d 475 (Mun.

Ct. App., D. C.) ; Wittek v. United States, 54 A. 2d 747 (Mun.

Ct. App., D. C.); ef. United States v. Weisenbloom, 168 F. 2d

698 (C. A. 2).

wu.s. GOVERNMENT PRINTING OFFICE: 1948 e21744 s72