Petition for a Writ of Certiorari — Zephyr Aircraft Corp. v. United States

Fs 1 4 x

SUPREME COURT OF THE UNITEU STATES

OCTOBER TERM, 1952

No. 298

; ZEPHYR AIRCRAFT CORPORATION,

i Petitioner,

3 vs.

=

§

THE UNITED STATES

j PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF CLAIMS AND BRIEF

IN SUPPORT THEREOF

Lorine M. Buack,

Counsel for Petitioner.

Wuuam E. Buck.ey,

Kermit F. Kip,

Of Counsel.

Rpts, [IP tig, Silt gulps

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SET Ae ON

INDEX

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Petition for writ of certiorari to the. Court of

RS Se eR

Opinion below .....

Jurisdiction ......

Questions presented

Statute involved ..... ca

NN i'd oih cis a. Catt ans

Specification of errors to be urged

Reasons for granting the writ. .

CE os attics Usher

Brief in support of petition for certiorari

Assignments of error.............

When the Court of Claims substituted its

judgment for that of Congress it usurped

the legislative power which is vested solely

in Congress under the Constitution. ..

Was the Court of Claims justified in dis-

missing the petition because, in their opin-

ion, Congress intended that a novel rule

rule of damages would be applicable?. . 9

Did the Special Act, Private Law 660, con-

fess liability on the part of the Govern-

ES Oe a cs 10

Is it incumbent upon the petitioner in order

to succeed in the litigation to show that it

would have won the competition? ! 12

Did not Congress in its enactment of Private

Law 660 intend to predicate the damage

suffered by the petitioner upon the refusal

of the officials of the War Department to

make a contract with the petitioner?.... 13

Can the Court substitute speculation and

conjecture based upon hearsay in place of

established facts? ............. merce 14

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il INDEX

Reasons for granting writ

A constitutional question is presented as

well as a we of statutory construe-

tion

The decision is in conflict with prior deci-

sions

The case is of general interest

Tas_Le or Cases CITED

Boudinot vy. United States, 18 Ct. Cl. 716.

Burkhardt v. United States, 84 F. Supp. 553

Carroll, June, et al. v. The District of Columbia, 22

Ct. Cl. 104 hare

Dill v. Pope, 29 Kan. 289

Garrett v. United States, 70 Ct. Cl. 304

Georgia Wholesale Co. v. United States, 84 Ct. Cl.

150 . ae

Guttormsen v. Unite d States, 43 Ct. cL 299 .

Indians of California v. United States, 98 Ct. C1.

583

Jordan v. Busch, 1 N. E. 2nd eee

Joseph Irwin and Company v. United States, 23 Ct.

ee ee

Lilly v. Haynes Co-op. Coal Mining Co., 196 N. W.

ge SO Sen ater urn ee

Mansfie ld v. United States, 89 Ct. CL 12

Marvin v. Rogers, 53 Tex. Co. App. 423

Miller v. Robertson, 266 U.S. 243

Minton v. F. G. Smith Piano Co., 36 App. D. C.

137

Norfolk Southern R. R. Co. vy. United States, 96 Ct.

Cl. 3357 ...

Philadelphia W. & B. v. Howard, 13 How. 307

Pope v. United States, 323 U.S.1........

Purcell Envelope Co. v. United States, 47 Ct. CL. 1

Radel Oyster Co. v. United States, 78 Ct. Cl. 816

Roberts v. United States, 92 U.S. 41.

Saeger and Moody v. United States, 40 c t. Cl. a.

Saint Louis Beef Co. v. Casualty Co. 201 U.S. 173

United States v. Behan, 110 U.S. 338

16 !

18

19

18

INDEX ili

Page

United States v. Realty Co., 163 U.S. 427 17

Walton v. United States, 24 Ct. Cl. 372 17

White v. Elgin Creamery Co., 79 N. W. 283 18

Wicker v. Hoppock, 6 Wall. 94 18

STaTuTEs aND OTHER AvTHORITIES CITED

Act of Congress of June 15, 1946, 79th Congress,

Second Session (Private Law 660) 2

Act of Congress of August 2, 1946, C. 753, 60 Stat.

843 (Federal Tort Claims Act) 12

Cireular Proposal 39-635, dated March 11, 1939 14

House of Representatives Bill 3094, 79th Congress,

First Session |. . 10

Rules of the Claims Committee of the House of Rep-

resentatives, Rule 16 aes 11

Senate Report 1235, 79th Congress, Second Session,

Pages 6 and 7... 11

United States Code Annotated, Title 28, Section

1255(1) as amended June 25, 1948, C. 646, 62

Stat. 928 eer NE Bie 1

United States Statutes At Large, Volume 44, Page

784 (Air Corps Act of July 2, 1926) 3,13

Williston on Contracts, Volume III, Revised Edition,

Page 1953 13

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1952

No. 298

ZEPHYR AIRCRAFT CORPORATION,

Petitioner,

vs.

THE UNITED STATES,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF CLAIMS

The petitioner prays that a writ of certiorari issue to

review the judgment of the Court of Claims in the above

case.

Opinion Below

The opinion of the Court of Claims (R. 47) is officially

reported in 104 F. Supp. 990.

Jurisdiction

The judgment of the Court of Claims was entered on

June 3, 1952 (R. 60). The judgement of this Court is in-

voked under Section 1255(1) of Title 28, U. S. Code as

amended June 25, 1948, c. 646, 62 Stat. 928.

Hind ad gon erates 08 34 5 Maina StS SM DREN “t

|

Questions Presented

There are two questions presented in this case:

First—Is the decision of the Court of Claims an at-

tempted usurpation of legislative power and therefore

unconstitutional?

Second—Did the Special Act of June 15, 1946 (R. 13)

create and declare the liability of the United States and

confess judgment in favor of the petitioner?

Statute Involved

The only statute involved is the Act of Congress approved )

June 15, 1946 (Private Law 660), 79th Congress, 2d Session,

reading as follows:

“*An Act

‘*Conferring jurisdiction upon the Court of Claims

of the United States to consider and render judgment

on the claim of the Zephyr Aircraft Corporation against

the United States.

**Be it enacted by the Senate and House of Repre-

sentatives of the United States of America in Congress

assembled, That jurisdiction is hereby conferred upon

the Court of Claims of the United States to hear, deter-

mine, and render judgment on the claim of the Zephyr

Aircraft Corporation, as successor to the Lenert Air-

craft Corporation, against the United States for com-

pensation for damage, injury, and losses suffered by

the said Lenert Aireraft Corporation, because of the

refusal by officials of the War Department to make a

contract with the said Lenert Aircraft Corporation in

compliance with section 10 of the Act of July 2, 1926

(44 Stat. 784), pursuant to a design competition for the

procurement of primary training planes, which was

projected by circular proposal 39-635, dated March 11,

1939.

“*See. 2. In the determination of such claim, the

United States shall be held liable for damages, and for

any acts committed by any of its officers or employees,

3

to the same extent as if the United States were a private

person.

**See. 3. Suit upon this claim may be instituted at

any time within one year after the passage of this Act,

notwithstanding the lapse of time, laches, the form and

content of protest, and supporting papers thereof.

Proceedings upon the determination of such claim and

appeals from the payment of any judgment thereon,

shall be in the same manner as in the ease of claims over

which the court has jurisdiction under section 145 of the

Judicial Code as amended.

‘*Approved June 15, 1946."’

Statement

The petitioner was a Michigan corporation which received

an invitation to bid in a design competition conducted by the

War Department pursuant to the Air Corps Act of July 2,

1926 (44 Stat. 784). Said invitation to bid contained an

offer of a quantity procurement contract for airplanes to

the winner or winners of said competition. The petitioner

accepted the said offer subject to the condition precedent

that its design be a winner in the competition and filed a

bid together with its plans, aeronautical reports, and the

necessary bond, but the Air Corps or the War Department

wholly failed to evaluate or assign figures of merit to the

design submitted by the petitioner in the competition, al-

though the purpose of the Air Corps Act of 1926 was to

compel an evaluation of all the designs submitted in order

to preclude any questions as to the correctness of the award.

In this manner the Air Corps or the War Department pre-

vented the petitioner from fulfilling the terms of the condi-

tion precedent. The petitioner was subsequently advised

by the Assistant Secretary of War that it was not a winner

in the competition as a result of the evaluation of all de-

signs. Thereafter petitioner filed a protest to said award

and demanded arbitration pursuant to the Air Corps Act

Se rare) ae

4

of 1926, which was summarily denied by the Assistant Secre-

tary of War. Petitioner also filed a protest with the Mili-

tary Affairs Committee of the House of Representatives.

Subsequently upon representations made to the petitioner

by the Assistant Secretary of War, that if the protest was

withdrawn petitioner would be considered for an experi-

mental contract, petitioner withdrew its protest and in so

doing stripped itself of its review by Presidential appeal

or appeal to the Federal Courts. Thereafter petitioner

sought relief from Congress and the Special Act (R. 13)

was enacted. A petition under the Special Act was there-

upon filed in the Court of Claims. Testimony was taken

and the Commissioner filed his report (R. 15). The Court

of Claims rendered the decision together with special find-

ings of fact (R. 47). It is from this decision and the judg-

ment rendered thereon that petitioner seeks a writ of cer-

tiorari for the review thereof. The Court of Claims has

held in effect that the Special Act did not create and de-

clare the liability of the United States to the petitioner.

Specification of Errors to Be Urged

The Court of Claims erred:

1. In attempting to usurp legislative power by re-

pealing in its decision a law passed by Congress.

2. By dismissing the petition because the Court held

that a novel rule of damages was intended by Congress

under the Special Act, and which said rule they refused

to find.

3. By holding that the Special Act, Private Law 660,

was not a confession of liability on the part of Congress.

4. In holding that the petitioner in order to succeed

must show that it would have won the competition.

5. In holding in effect that Congress in passing

Private Law 660 did not intend to make the refusal by

officials of the War Department to make a contract with

petitioner actionable.

5

6. In substituting speculation and conjecture, based

upon hearsay, in place of established facts.

7. In failing to render a judgment on the claim; i.e.

in dismissing the petition of the petitioner based on the

Special Act.

Reasons for Granting the Writ

1. The decision of the Court below involves an important

constitutional question, as well as a question of statutory

construction, and therefore is of the class of cases which

this Court will customarily review.

2. The decision of the Court below is erroneous and is in

conflict with a long line of earlier decisions by that Court,

as well as decisions of other Courts, and is in conflict with

the settled law. The questions presented are of wide im-

portance and are of a similar nature to questions which

have been passed upon in other instances by this Court, and

the decision of the Court of Claims is in conflict with the

prior decisions of this Court.

3. The questions presented are of wide and general in-

terest since there is involved a review by the Court of

Claims of Congressional discretion, as well as the proper

interpretation of special legislation.

Conclusion

The assigned errors and the reasons for granting the

writ asked will be discussed in the short brief accompanying

this petition.

It is respectfully requested that the writ be allowed.

Lorine M. Brack,

Attorney for Petitioner.

WituiaM E. Buck.ey,

Kermit F. Kr,

Of Counsel.

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1952

No. 298

ZEPHYER AIRCRAFT CORPORATION,

Petitioner,

vs.

THE UNITED STATES,

Respondent

BRIEF IN SUPPORT OF PETITION FOR CERTIORARI

Assignments of Error

(a) When the Court of Claims substituted its judgment

for that of Congress it usurped the legislative power

which is vested solely in Congress under the Constitu-

tion.

The broad constitutional power of Congress to pay the

debts of the United States is beyond question. It is also

beyond question thet Congress has the power to change a

moral obligation into a valid existing legal obligation

which must be honored by the United States. It may be said

that in this manner Congress is the ‘‘conscience of the

country.’’

The claim of the petitioner herein was, in its inception,

addressed to the conscience of Congress. Recognizing as

it did, that the officials of the War Department had wronged

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the petitioner, Congress gave redress by enacting the

Special Aet herein,

The Special Act declared the liability and confessed it

in favor of the petitioner. However, since the damages

were unliquidated, Congress referred the matter to the

Court of Claims to ascertain the extent and amount of the

damages whieh petitioner had suffered.

In enacting the Speeial Aet, Congress exereised its dis

cretion and in Section 2 thereof deprived the respondent

of any defense of sovercignty and deelared its liability

for its aets to be ‘to the same extent as if the United

States were a private person."’

The opinion of the Court below did not earry out the

intent of Congress. Instend of abiding by the Speeial

Act, the Court of Claims apparently reviewed the Congres.

sional diseretion and substituted its own for that of Con-

gress.

The crux of the decision below is found in this language

of the Court:

“We think that, in the cireumstanees, an award to

the plaintiff of a contract for the quantity procurement

of a type of plane whieh existed only upon blue prints

would have amounted to a reckless waste of public

funds and of crucial time in the preparation of the

country’s defenses." (RL 57).

This statement by the Court divulged the motivating

force for its decision. The Court below, throughout its

opinion, treated the respondent, net as an individual or

private person, as Congress had intended, but as the sev-

ereign. It disregarded completely the provisions of the

Special Aet whieh had stripped the respondent of its

sovereign immunity. The Court was in effect legislating

to repeal an act of Congress. It usurped powers whieh it

did not possess. Created as it was by statute, it has now

;

‘

'

_——

9

pre-empted the powers of its creator. This it cannot do.

Its error demands correction.

(b) Was the Court of Claims justified in’ dismissing

the petition because, in’ their opimion, Congress

intended that a novel rule of damages would be

applicable?

The petitioner does not concede that auy novel rule of

damages would apply in the instant ease. Uuder the con.

fessed liability the well settled rules of damages would be

controlling. To assume, as did the Court below, that a

novel rule of damages must be found and applied, was no

ground upon which to dismiss the petition,

The Court below stressed the fact that in order to comply

with the Congressional intent, it must find that a novel

rule of damages was applicable. The rationale seems to

have been that if they agreed with the petitioner ‘that

Private Law 660 was a confession by Congress of wrong

doing on the part of the War Department in refusing to

make a contract with the plaintitY, we would still be com

pletely frustrated in attempting to fir an amount of lrabil

ity.” (Mimphasis supplied) (RL o7),

It is clear that the frustration which was felt by the Court

below on the question of damages was a strong fuetor in the

decision of dismissal. The opinien concluded with a eon

tinuation of the frustration when in again speaking on the

question of the confession of liability by Private Law

660, the Court said in efeet that even if the Act did eontess

linbility **we would also have to find that it had enacted a

novel rule fer the measure of damages, before we could

award damages to the plaintiff on the facts of this case."

(R.59). Thereupon it dismissed the petition.

Obviously the Court refused to abide by the direction of

Congress.

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APU DPE AA LN PEERLESS TRANS OLE DERN PAB LIES REN HE WI I a

10

The Court of Claims is a legislative Court, created by

Congress, and as such is subject to Congressional diree-

tives. If Congress had seen fit to prescribe a novel rule of

damages, as the Court below has assumed it did, then it was

the duty of the Court to have applied to the facts any rule

of damages which Congress, in its wisdom, saw fit to pre-

scribe.

It was not the function of the Court below to dismiss the

petition because of novelty or frustration. It was their duty

to carry out and give voice to the intent of Congress. The

Court of Claims has been remiss in its duty. Its errors

warrant review by this Court.

(c) Did the Special Act, Private Law 660, confess liability

on the part of the Government?

The answer to this question is ‘‘Yes.’’ The Court below

has nullified the intent of Congress to redress the wrongs

done to the petitioner. It has said that there is nothing in

the legislative history which indicates that the language em-

ployed should have any special meaning (R. 57). It is

significant, however, that although the documents upon

which the legislative history is based were admitted in

evidence, yet no findings of fact were made thereon by the

Court, despite the request of petitioner for such findings.

A discussion of the intent of Congress and the legislative

history is contained in the briefs in the Court of Claims

(pp. 57-62, 108-124, 290-292) and we respectfully refer to

those portions of the record now before this Court. There

are, however, certain salient facts which cannot be over-

looked. The first time the Special Act was passed by Con-

gress it was pocket vetoed by President Roosevelt.

Another bill, H.R. 8094, was introduced in the 79th Con-

gress, Ist Session, which subsequently became Private Law

660, the Special Act in question. Its history is set forth in

<i

11

Senate Report 1235, 79th Congress, 2nd Session. At pages

6 and 7 of the said report the picture is clearly presented of

the Congressional intent.

Rule 16 of the Claims Committee of the House of Repre-

sentatives, which was a bar to the consideration of the bill,

was unanimously waived when it was pointed out that this

was a matter which President Truman, as a Senator, had

investigated and about which he had reported to Congress

as:

‘¢ Another example which might be cited is the case of

the Zephyr Aircraft Co., whose case was heard in an

informal hearing with committee counsel. According

to the record, the Zephyr Co., in response to an invita-

tion for a design bid for a new type trainer, issued by

the Army Air Corps, submitted a design which it

claimed could be mass produced with unskilled labor at

a cost of $3,000 each. The record further showed that

this design was never even evaluated by the Army and

they made no claim that the Zephyr people could not do

all they said they could or that their design was unsatis-

factory. Instead of purchasing a new design, a contract

was let, at twice the cost, to another company for bi-

plane trainers which were the same type, with some

improvements, that had been used for many years and

which are now being discontinued. The Zephyr people

filed a protest which was apparently none too diplo-

matic but were never given a hearing by the War De-

partment. It was testified further that, at the request

of the Department, the company agreed to eliminate one

individual who was personally distasteful to certain of-

ficials. They were told that they could have an experi-

mental order and later told differently. Finally it was

testified that they were told that no matter how good

their plane was they could not get an order because of

personalities involved and because it might look as if

the Army was admitting a mistake in its original fail-

ure to give proper consideration to Zephyr’s bid.’’

i Bee edt mien oy ibis emits

VAS nail Maia ,

12

Had Congress intended to limit the liability it would have

employed words of limitation similar to that employed by

the same Congress in the Federal Tort Claims Act (Act

Aug. 2, 1946, © 753, 60 Stat. 843), wherein it was provided

that **the United States shall be liable in respeet to such

claims ° * * inthe same manner, and to the same extent

asa private individual * * *"*

The words ‘tin the same manner’ are words of limita-

tion which place the question of liability directly upon the

Court for its determination. In the Special Act at bar,

the words of limitation were significantly omitted. When

Congress said ‘the United States shall be held liable for

damages * * * to the same extent as if the United

States were a private person’ no limitation was placed on

the liability. It was conceded. Only the extent of the dam

ages was to be determined.

The Court below was in error. Its decision is contrary

to the expressed intention of Congress.

(d) Ts it incumbent upon the petitioner in order to suc

ceed in the litigation to show that it would hare won

the competition?

The answer is emphatieally **No."") The petitioner could

not show that it would have won the competition, since it

was prevented from winning by ‘the very acts of the re

spondent.

The respondent failed to evaluate the design of the

plane submitted by the petitioner in the competition. In

this manner the respondent prevented a comparison of the

figures of merit which should have been awarded to the

petitioner's design pursuant to the provisions of the Air

Corps Act of 1926, with those figures given to the winning

designs.

Furthermore, the Court of Claims treated this phase

of the entire question as one in whieh only a competition

t

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_

was involved. Its opinion completely ignored its Find-

ing No, 5, that the contract contemplated by the Cireular

Proposal had as a condition preeedent thereto that it

would be awarded to the winner or winners of the design

13

competition CR. S8). Tt is fundamental that one who

promises to buy goods if satisfactory cannot. set up the

failure to perform the condition if by refusing to examine

the goods he has prevented the condition from happening,

(Williston on Contracts, Vol. TIT, Rev. Ed., p. 1958).

Yet the Court completely disregarded this phase of the

matter and said in effect that the petitioner did not prove

that it was the winner of the competition and therefore

cannot reeover. Tt has completely disregarded, not alone

the fundamental principle of law, but has likewise eom-

pletely disregarded the plain intent of Congress wherein

in enacting Private Law 660, the petitioner's right of re-

covery Was based upon ‘the refusal by officials of the War

Department to make a contract with the said Lenert Air-

eraft Corporation in compliance with section 10 of the Aet

of July 2, 1926 (44 Stat. 784), pursuant tea design ceom-

petition for the procurement of primary training planes,

Which was projected by Cireular Proposal 39-685, dated

Mareh 11, 1989,""

(©) Id not Congress in its enactment of Private Law

HOO intend to predicate the damage suffered by the

petitioner upon the refusal of the officials of the War

Department to make a contract with the petitioner?

The answer to this question must be, we submit, in the

affirmative. We cannot assume that the Act of Congress

Was a futile one. Congress being aware of all of the facts

as a result of its investigations and being fully cognizant

of the fundamental principles of law clearly determined in

its own mind that the officials of the War Department and

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14

their utter disregard of the clear intention of the Air Corps

Act of 1926, had deprived the petitioner of that to which

it was justly entitled and within its broad constitutional

powers created for the petitioner a legal right to recover

its damages where only a moral wrong had existed there-

tofore.

To permit the Court of Claims, a statutory creature, to

thwart by its decision the clearly expressed intent of Con-

gress should not be countenanced. The Court of Claims

by its opinion and decision in the case at bar has stifled

the voice of its creator.

(f) Can the Court substitute speculation and conjecture

based upon hearsay in place of established facts?

Throughout its opinion the Court has used imagination,

conjecture, and speculation, and it has gone to great length,

we submit, in negating the findings of fact of its own Com-

missioner.

Perhaps the most glaring example related to the pro-

duction facilities of the petitioner. Upon the hearings be-

fore the Commissioner the petitioner undertook to estab-

lish that it was ready, able, and willing to perform the con-

tract contemplated by Circular Proposal 39-635. The re-

spondent sought to controvert the proof of the petitioner,

leaving thus for the consideration of the Commissioner

the question of fact. The Commissioner, as the fact finder,

found as follows:

‘‘The weight of the evidence establishes further

that the plaintiff, with the production facilities it then

had and the design data it had or could secure, could

have produced experimental models of its airplane, as

aforesaid, within any reasonable time required, but

not less than 60 days. Although, the Circular Proposal

or Invitation to Bid, No. 39-635, did not require proof

15

of ability to produce in quantity, the weight of the evi-

dence establishes that within a reasonable time after

approval of experimental and service-test models and

receipt of a quantity contract, considering prepara-

tions already undertaken, the plaintiff could have been

tooled up and able to produce two planes per 24 hours.”’

(R. 30). :

However, the findings of the Court contain no finding

upon this point. It has been completely omitted and in-

stead this surprising statement is made:

‘As we have said, we think that when the War De-

partment issued its invitation for bids, it contemplated

the procurement of a large number of planes and,

therefore, impliedly limited the design competition to

bidders who submitted designs of planes of proven

ability to perform and who had facilities for their

prompt manufacture in quantity. The original state-

ment, then, of the Engineering Evaluating Committee

that it disregarded the plaintiff’s design because of

insufficient proof of ability to produce in quantity in

the time required probably represented at least one of

the principal reasons why, in the Committee's opinion,

plaintiff’s design was ineligible. To be sure, no in-

formation was requested in the invitation for bids con-

cerning the plaintiff’s ability to produce planes. But

the Committee may well have known, by hearsay and

report among persons familiar with the plane manu-

facturing business, how little the plaintiff had in the

way of production facilities.’’ (Emphasis supplied)

(R. 53).

Obviously the Court was speculating upon what the Com-

mittee may well have known by hearsay concerning the

production facilities of the petitioner. Clearly it disre-

garded the testimony and the findings of fact of its own

Commissioner. In so doing it completely disregarded its

own duties which it said in its opinion were ‘‘to ascertain

Bevkitescions CAROL ARR eS Satie FPR oles Cale ches

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16

the facts, apply the law, determine that there is, or is not,

liability, and if there is liability, the amount of it’’ (R. 57).

When the Court of Claims indulged its own speculation

and conjecture upon hearsay then, we submit, its error by

its own concept of its duties is so apparent that redress

by appeal should be given to the petitioner.

Reasons for Granting Writ

(a) A Constitutional Question is presented as well as a

Question of Statutory Construction

The decision of the Court below is in direct conflict with

the powers of Congress as set forth in the Constitution.

Although only a statutory Court, it has nevertheless held

in effect that Congress has not the power to confess judg-

ment in the instant case. It has presumed to legislate by

its decision and, in effect, repeal Private Law 660. It has

construed the Special Act in such a manner as to completely

nullify the expressed will of Congress. Its interpetation

of Private Law 660 makes of the Act a futile thing. Its

confessed frustration, in following the directive of Con-

gress, and its refusal to do so, have made its decision in the

instant case illogical and illegal.

It cannot be doubted that the questions here involved are

of the precise type which this Court will ordinarily review.

(b) The decision is in conflict with prior decisions

The decision of the Court of Claims has held in effect that

Congress was without authority to confess liability in the

instant case. Such a holding by the lower Court is in direct

conflict with all of those cases wherein it has been estab-

lished that the power to grant relief in a case such as this,

is vested solely in Congress by the Constitution. (Boudinot

v. U. S.,18 Ct. Cl. 716; Garrett v. U .S., 70 Ct. Cl. 304; Mans-

field v. U. S., 89 Ct. Cl. 12; Burkhardt v. U. S., 84 F. Supp.

17

553; Pope v. U. S., 323 U.S. 1; Norfolk Southern R. R. Co.

v. U.S., 96 Ct. Cl. 357.)

In its refusal to treat the respondent as a private person

in accordance with the expressed intent of Congress, the

decision of the Court below is in direct conflict with the

prior decisions in the following cases: Walton v. U. S., 24

Ct. Cls. 372; June Carroll, et al. v. The District of Columbia,

22 Ct. Cls. 104; Joseph Irwin & Co. v. UL S., 23 Ct. Cls. 154;

Sanger and Moody vy. U.S., 40 Ct. Cls. 47,

The Court below in effect reviewed the legislative discre-

tion exercised by Congress and used its own discretion in

rendering its decision.

It is well settled that the Courts will not review legislative

discretion unless the same may be termed arbitrary or ca-

pricious. The question of the relief sought by the petitioner

before Congress was clearly a matter of legislative disere-

tion. The relief granted in the Special Act was neither

arbitrary nor capricious. The Court below was powerless

to review it. It was solely the responsibility of Congress.

(Walton v. U. S., supra; Guttormsen v. U. S., 48 Ct. Cls.

299.)

The Court below, in its frustration over the question of

damages failed to consider that it was within the power of

Congress to grant any relief which in its wisdom it saw fit

to grant. (Indians of California v. U. S., 98 Ct. Cls. 583;

Radel Oyster Co. v. U. S., 78 Ct. Cls. 816; U. S.v. Realty Co.,

163 U. S. 427; Roberts v. U.S... 92 U.S. 41.)

The Court of Claims after denying that the Special Act

was a confession of liability, failed to apply the well settled

rules of law relating to breach of contract and its subse-

quent damages. The proposition is a simple one. The

respondent offered to contract with the winner of a design

competition. The petitioner accepted the offer. At this

point there was a binding contract (Vinton v. F. G. Smith

Piano Co., 36 App. D. C. 137).

DB itactirscorains Pega a nl oe a hye ess Ge eat

mL SR aS,

18

The contract, however, was subject to the condition prece-

dent that petitioner should be the winner (Finding No. 5;

R. 33). When the respondent failed to evaluate the de-

sign, by its own act, it prevented the performance by the

petitioner. Obviously, it cannot set up the failure to per-

form, in defense of its own act which prevented the per-

formance. Yet this is precisely the tenor of the decision

below which in effect has held that since petitioner could

not prove it would have won because of the acts of the re-

spondent, therefore, it is without remedy.

Its holding on this point is contrary to the Special Act

itself, as well as the general principles of law applicable

to the instant case, and the prior decisions of the Court

below and Courts of other jurisdictions. It is in conflict, we

submit, with the following decisions:

St. Louis Beef Co. v. Casualty Co., 201 U.S. 1738;

Jordan vy. Busch, 1 N. BE. 2nd 745 (IIL);

Marvin v. Rogers, 53 Tex. Civ. App. 423;

Dill v. Pope, 29 Kan. 289;

Lilly v. Haynes Co-op. Coal Mining Co., 196 N. W. 556;

White v. Elgin Creamery Co., 79 N. W. 283;

Minton v. F. G. Smith Piano Co., supra;

Purcell Envelope Co. v. U. S., 47 Ct. Cl. 1;

Georgia Wholesale Co. v. U. S., 84 Ct. Cl. 150.

Had the lower Court correctly interpreted the Special

Act, it would not have been frustrated by the rule of dam-

age. Its failure to do so, has placed its decision in direct

conflict with the well settled rules of damages as expressed

by this Court:

Wicker v. Hoppock, 6 Wall. 94;

Miller v. Robertson, 266 U.S. 243;

Purcell Envelope Co. v. U.S. supra;

U.S. v. Behan, 110 U.S. 338;

2

Ez

ised

St

19

Philadelphia W. & B. v. Howard, 13 Wow. 307;

St. Louis Beef Co. v. Casualty Co., supra.

In Wicker v. Hoppock, supra, at page 99 the Court laid

down the fundamental rule saying:

‘“‘The general rule is that when a wrong has been

done and the law gives a remedy, the compensation

shall be equal to the injuries. The latter is the

standard by which the former is to be measured.’’

In the case at bar the Special Act gave to the petitioner

the remedy. The damages were to be ascertained by the

Court. In view of the well settled rule of damage it is

hard to conceive the frustration felt by the Court below on

this question.

Mr. Justice Holmes in St. Louis Beef Co. v. Casualty Co.

supra, succinetly stated the rule at page 181, wherein he

said:

‘*In general when one party by his fault prevents the

other party to a contract from entitling himself to a

benefit under it according to its terms, the former is

liable for the value of that benefit less the value or cost

of what plaintiff would have had to do to get it ty

It would appear that the damages which Congress di-

rected the Court of Claims to admeasure and award to the

petitioner were ascertainable under the well settled rules

of damage.

The Case Is of General Interest

Undoubtedly, Congress will, in the future have many in-

stances wherein it will grant relief under special acts.

Since the Court of Claims has developed a tendency to re-

view Congressional discretion and has found difficulty in

interpreting such special acts, a final decision by this Court

tw 7

as to the proper interpretation and application of such

special acts is therefore of wide and general interest.

Lorine M, Buiack,

Attorney for Petitioner.

20

WiuuaM E. Buck.ey,

Kermit F. Kip,

Of Counsel.

(3714)

INDEX

Opinion below

Jurisdiction _.

Questions presented

Statute involved

Statement

Argument

Conclusion

Appendix

CITATIONS

+ CASEs:

Braden v. United States, 16 C. Cls. 389

Eastern Transp. Co. v. United Siates, 272 U.S. 675

Feres v. United States, 340 U.S. 135

Gates v. United States, 87 C.Cls. 358 -

Grant v. United States, 192 F.2d 482 _- a

Gregory v. United States, 57 F.Supp. 962, certiorari ‘de-

nied, 326 U.S. 747 9,10

Hempstead Warehouse Corp. v. United States, 98 F. Supp.

572 10

Kuhnert v. United States, 127 F.2d 824 11

Louisiana v. McAdoo, 234 U.S. 627 18

Martin v. United States, 61 C.Cls. 430 17

Massey v. United States, 198 F.2d 359 11

Minton v. F. G. Smith Piano Co., 36 App. D.C. 137 18

Pine Hill Co. v. United States, 259 U.S. 191 ifs 9

Pope v. United States, 323 U.S. 1 11

Randall v. United States, 71 C.Cls. 152, certiorari denied,

283 U.S. 826 10

Stanton v. United States, 68 C.Cls. 379 10

Stewart v. United States, 206 U.S. 185 11

Tillson v. United States, 100 U.S. 43 11

United States v. Cumming, 130 U.S. 452 10

United States v. Durrance, 101 F.2d 109 10, 11

United States v. Goltra, 312 U.S. 203 9

United States v. Mille Lac Chippewas, 229 U. S. 498 19

in Index Continued

STATUTES: Page

Air Corps Act of July 2, 1926, 44 Stat. 780, 784:

Section 10 (10 U.S.C. $10) ........2002............. §

Section 10(a) _...____. C semeie oe een 3

SN PUR on enna akmcousneaeeus enh neeckeen 3

RUE WORD vccccmnce cuukccnudnmiunehuor keenuneee eRe

Meee: PONE) o.oo occ ccce Ee eee

ee ee ed ee OAT Rs fe

RE SED noc wncmndanungcuupe usucnWecceuste. Un }

Section 10(k) ___- E Lped ieee oe es 18 {

Private Law 660, 79th Cong., 2d Sess., 60 Stat. 1227, ap-

proved June 15, 1946 -~ 3 * iden ae

MISCELLANEOUS:

87 Cong. Rec., Pt. 1, pp. 297-302, 77th Cong. Ist Sess. (Jan. )

24, 1941) _ ; oe sacar faa 12 \

90 Cong. Rec., Pt. 5, p. 6713 : 15

H. Res. 140, 77th Cong., Ist Sess. _... _. __- : 12 x

H. R. 5543, 77th Cong. __. ; . : 12 p

Section 3 - SHOES a0 ree 13 be

H. R. 3596, 78th Cong. 14 FE

H. R. 3094, 79th Cong. 15 :

H. Rept. No. 1145, 78th Cong., 2d Sess., p. 1 14

H. Rept. No. 1064, 79th Cong, Ist Sess. p.5 15 }

S. Rept. No. 480, Part 5, 77th Cong., 2d Sess., p. 63 12 '

S. Rept. No. 909, 78th Cong., 2d Sess., pp. 2-4 * 13, 14

. SS. Rept. No. 1235, 79th Cong., 2d Sess., pp. 2-5, 6 13, 14, 15, 16

Gnthe Supreme Court of the United States

OcTroBER TERM, 1952

No. 298

Zevuynk Ammcrarr Corporation, Petitioner

Vv.

THRE UNrrep States

On Petition for a Writ of Certiorari to the United States

Court of Claims

———_—

BRIEF FOR THE UNITED STATES IN OPPOSITION

—_—

OPINION BELOW

The opinion of the Court of Claims (R. 47-60)

ix reported at 104 F. Supp. 990.

JURISDICTION

The judgment of the Court of Claims was

entered on June 3, 1952 (R. 60). The petition for

a writ of certiorari was filed on August 28, 1952.

ee

7

Sealant ark se rc, er ee mB Tae Guuek

NIE aa nae Pa AR i, ob

a

2

The jurisdiction of this Court is invoked under

28 U.S.C. 1255(1).

QUESTIONS PRESENTED

1. Whether the court below correctly held that

Private Law 660, 60 Stat. 1227, conferring juris-

diction upon the Court of Claims to hear and de-

termine petitioner’s claim against the United

States for refusal to award it a contract for

military aircraft, was not an admission of re-

spondent’s liability leaving only damages to be

assessed.

2. Whether the court below correctly held that

such refusal to award a contract did not entitle

the petitioner to recover damages from the United

States.

STATUTE INVOLVED *

‘The applicable statute is set out in the Appen-

dix, infra, pp. 20-21.

STATEMENT

Petitioner brought suit against the United States

to recover damages alleged to have been suffered

hecause officials of the War Department refused to

award a contract for military aircraft. The action

was begun under a private act’ conferring juris-

diction upon the Court of Claims ‘‘to hear, deter-

mine, and render judgment” on petitioner’s claim.

Private Law 660, 79th Cong., 2d Sess., 60 Stat. 1227, June

15, 1946, set out in the Appendix, infra, pp. 20-21.

Petitioner, formerly known as the Lenert Air-

craft Corporation (It. 31), was one of twelve firms

which responded to an invitation to bid in a com-

petition for new and improved designs of primary

training planes. ‘The competition was sponsored

by the War Department in 1939 pursuant to Sec-

tion 10 of the Air Corps Act of July 2, 1926, 44

Stat. 780, 784, 10 U.S.C. 310.2 The invitation to bid

*The purpose of Section 10 of the Air Corps Act is to en-

courage the development of aviation and to improve the effi-

ciency of Army and Navy aviation materiel. Subsection

(a). The Act establishes a procedure under which the See-

retary of War invites the submission in competition of new

designs of aircraft, aircraft parts and accessories. The

bidder is required to state the price for which the designs

will be sold to the Government. bid. The Act provides for

the evaluation of the designs by a board appointed for that

purpose by the Secretary and for the board’s report to him

as to the winner or winners of the competition; but if he dis-

approves the report he may return the report to the board

for revision ‘‘or the competition [shall] be decided by the

Secretary, in his discretion, and in any case the decision of

the Seeretary shall be final and conclusive.’’ Subsection (b).

Thereupon, the Secretary *‘is authorized to contract with

the winner or winners in such competition on such terms and

conditions as he may deem most advantageous to the Gov-

ernment’? for furnishing the materiel within a reasonable

time, or if the Secretary shall decide that a winner cannot

reasonably carry out such a contract, the Seeretary ‘‘is

authorized to purchase the winning designs’’ at an agreed

price but not in excess of the bid (Subsection (¢)), and he

may then contract with others to construct the materiel in

accordance with such designs. Subsection (¢). If, in the

judgment of the Secretary, none of the designs submitted is

of sufficient merit, ‘‘then he shall not be obligated to accept

any of such designs’’. Subsection (f). The Act also pro-

vides that if any participant in the competition shall make

FLO ed A aa SLOP RNID § sin &

4

(called Circular Proposal 39-635) contemplated a

quantity procurement of the planes of the bidder’s

design and asked for bids on quantities up to 1,000

(R. 33, 49). But winning the design competition

Was a condition precedent to the award of the con-

tract contemplated by the invitation (R. 33-34).

Moreover, under the established Army procure-

ment policy, a quantity procurement contract

could not be awarded for an unproven plane; such

a plane could only be the subject of an experi-

mental order (R. 45, 50).*

The design submitted by petitioner was based

upon well-known principles of aero-dynamics,

presented little that was new, but did incorporate

a device to reduce the possibility of spins (R. 34).

Ilowever, the flight characteristics of the proposed

plane had not been determined by reduction to

practice—there was no working model and such

to the Secretary ‘‘a reasonable showing in writing that error

was made in determining the merits of designs submitted

whereby such claimant was unjustly deprived of an award,”’

the matter shall be referred to a board of arbitration and its

finding, with the approval of the said Secretary, shall be con-

clusive on both parties. Subsection (h).

* Under established Army procurement policy, if an experi-

mental plane, @.e., a plane not reduced to practice, had suffti-

cient merit upon evaluation of its design, a contract could be

let for an experimental order of one to three planes. If, after

construction and testing, the experimental plane was found to

have merit, the contractor might be given an order for a serv-

ive-test quantity of 13 planes. If, after testing the service-test

quantity, the plane was found suitable, an additional quantity

procurement contract could be let (R. 45).

REE Nak PPO RP NS PATE ICAO SOD OE TT Be SETI EI RS A a

ae ae hh Dee

5

a plane had never been built (R. 34, 46). Indeed,

at the time of the design competition, petitioner

was not actively operating as a plane manufac-

turer (R. 32). While these factors had no bear-

ing on the design competition, they did predeter-

nine petitioner’s ineligibility for the quantity pro-

curement contract contemplated by the Circular

Proposal (R. 46).° Moreover, the Cireular Pro-

posal provided that as a prerequisite to a bid for

the sale of the plane in quantity, the bidder must

also submit a bid for the sale of the design (R. 44).

Petitioner was not interested in selling its design

and its bid was confined solely to a quantity sale of

its proposed plane (ibid.).

The competition closed on July 7, 1939. Three

weeks later, the evaluation officers supervising the

competition submitted a report to the Secretary

of War recommending three winners. The report

* Petitioner had been organized by Willy Lenert who had

heen interested in aviation since 1909. He built a few planes

during the ’twenties but his corporation, which at its peak

employed only eight or ten men, apparently became inactive

after the 1928-1931 economie crash. In 1939, a production

specialist became interested in the Mr. Lenert’s company and

furnished $3000 to finance the design which was submitted in

the competition involved in this action. (R. 31-32). The design

was prepared by college engineering students working under

the supervision of a graduate student and a professor of

aeronautical engineering (R. 34). The design was for a

monoplane, a type of aircraft which, up to that time, was

unaceeptable to the Air Corps for primary training use due to

factors affecting controllability and maneuverability (R. 39).

* See fn. 3, supra.

CS a acne ie

6

stated that petitioner’s design was disregarded be-

cause Of “Insufficient proof of ability to produce

in quantity in the time required’? (R. 35). Five

other designs were similarly disregarded (ibid.).

The report was returned by the Secretary for

further proceedings because of the Evaluation

Board’s failure to evaluate all of the designs sub-

mitted or to assign proper reasons for not doing

so (R. 36-37). It was his view that the appraisal

must be made upon the basis of designs and not

upon the basis of reduction to practice or ability

to produce, as these were matters to be considered

after the determination of the winners (R. 37, 51).

Information as to production facilities had not

been requested by the Cireular Proposal (R. 49-

D0).

Thereafter, the facts relating to the engineering

analysis of the rejected designs were reexamined.

Although petitioner's proposed airplane received

some favorable comment, the Evaluation Board, in

its final report, stated that it was disregarded be-

‘ause its “performance, aerodynamics, installa

tious, and structural features were not susceptible

to proofs of the practicability of sueh designs for

reduction to practice’’ (R. 38).*

“Under the terms of the Circular Proposal this was a sufti-

cient reason for disregarding the design (R. 37, 52). although

inability to produce in quantity in the time required probably

remained as one of the principle reasons for rejection (R, 53-

54).

££

7

On September 6, 1939, the Air Corps announced

as winners of the competition the three firms

originally recommended by the Board (R. 40). A

few days later, a contract for 480 planes was

negotiated with the first place winner. During

the years 1939-1945 a total of 12,300 primary

training planes were purchased from the three

Winners (ibid.).

On September 9, 1939, petitioner sent a telegram

to the Secretary of War protesting the result of

the competition and requesting arbitration under

the provisions of Section 10(h) of the Air Corps

Act (R. 41). The Secretary rejected the protest

for the reason that petitioner had failed to make

“a reasonable showing in writing that error was

made in determining the merits of designs sub-

mitted’, whereby petitioner was deprived of an

award, as required by that Section (R. 42). Peti-

tioner then filed a protest with the Military Affairs

Committee of the House of Representatives (R.

43).

Thereafter, a representative of petitioner con-

ferred with the Assistant Secretary of War in an

eifort to obtain an experimental contract under

Section 10(k) of the Air Corps Act. Such a eon-

tract could be awarded without competitive bid-

ding. The representative was told that Mr.

Lenert, petitioner's then president, was unreliable

and troublesome, but that an experimental con-

tract would be considered if Mr. Lenert was ousted

Micmiétrcclimesce «{

nr grk eeEeEIE»™~

8

from the corporation and if petitioner withdrew

its protest under the Circular Proposal (R. 43).

Petitioner thereupon changed its name, Mr.

Lenert resigned as president, and the protests to

the Secretary of War and the Committee of the

House were withdrawn (R. 43-44). In June, 1940,

petitioner's plant and personnel were inspected by

the Air Corps. The inspectors reported that both

Were insufficient to justify a contract. The

Assistant Secretary of War then informed ‘peti-

tioner that a contract would not be awarded. Three

additional inspections were made in August and

September, 1940, and January, 1941, but the re-

ports were the same and the Assistant Secretary

did not change his position (R. 44, 47). Petitioner

subsequently sought and obtained private legis-

lation permitting suit upon its claim based upon

the denial of a contract, and this action followed.

The Court of Claims held that Private Law 660

conferred jurisdiction to determine the merits of

petitioner's claim and was not a Congressional con-

fession of liability: that the Cireular Proposal

contemplated a procurement contract for a plane

Whose satisfactory performance and availability

for quantity production, with its improvements,

were certain: that the refusal to award a contract

to petitioner did not constitute an actionable

Wrong: that petitioner could not have won the

competition: and that, in any event, its alleged

damages were too speculative to support a judg-

ment. Accordingly, the petition was dismissed.

a

9

ARGUMENT

1. Petitioner asserts that in denying recovery

the decision below usurped the legislative power

Which is vested solely in Congress and also nulli-

tied the express will of Congress (Pct. 7, 16). This

argument is based upon a demonstrably erroneous

premise which pervades the entire petition, viz.,

that the private act conceded liability on the part

of the United States and conferred jurisdiction

upon the Court of Claims merely to assess

damages. But nowhere in the act is there language

which either admits or concedes liability. Rather,

the language of the act clearly contemplates that

the Court of Claims shall, as the decision below

correctly states (R. 57), ‘tascertain the facts,

apply the law, determine that there is, or is not,

liability. and if there is liability, the amount of it.”

(a) It has long been established that special

jurisdictional acts must be strictly construed

(United States vy. Goltra, 312 U.S. 203, 210) and

unless the language is very clear they are never

to be construed as conceding the liability of, or

imposing it upon, the United States (Gregory

v. United States, 57 F. Supp. 962. 970 (C. Cls.),

certiorari denied, 326 U.S. 747; ef. Pine Hill Co.

v. United States, 259 U.S. 191, 196: Eastern

Trausp. Co. Vv. United States, 272 U.S. 675, 686).

For, it is presumed that if Congress intends to do

more than afford a forum to test the liability, that

intention will be *‘expressed in language not to be

:

&

;

i

i

i

10

misunderstood.”’ United States v. Cumming, 130

U.S, 452, 455. Absent such clear and unambiguous

language, special legislation conferring juris-

diction upon the Court of Claims *‘to hear, deter-

mine, and render judgment’? on a claim is not to

he construed as an admission of liability, but

simply as providing ‘ta forum for the adjudication

of the claim according to applicable legal prin-

ciples.”” United States v. Mille Lae Chippewas,

229 U.S. 498, 500. The cases acknowledging the

point are numerous.’

The private act in this case conferred jurisdic-

fon upon the Court of Claims ‘to hear, determine,

and render judgment’? on petitioner’s claim

against the United States and provided that, ‘In

the determination of such claim, the United States

shall he held liable for damages, and for any acts

committed by any of its officers or employees, to

the same extent as if the United States were a

private person.’ Petitioner points to no words

Which meet the test of the above cases, that the

language indicating an admission of liability must

he very clear and not such as ean be misunder-

stood, but relies instead upon these words equating

the United States to a private person (Pet. 12)—

*E.g., United States v. Cumming, supra; Grant v. United

States, 192 F. 2d 482, 484 (C.A. 4); United States v. Dur-

ranec, 1O1 F. 2d 109 (C.A. 5); Hempstead Warchouse Corp.

‘ United States, 98 F. Supp. 572, 573 (C. Cls.) = Gates vy.

Murted States, 87 C. Cis. 358, 371; Gregory v. United States,

vnra: Randall v. United States, 71 C. Cls. 152. certiorari

Cenied, 283 TS. 826: Stanton v. United States, 68 C. Cls. 379.

ee

Ra ee

ore SO

r

words which obviously qualify not only the extent

of the damages to be awarded but also the nature

of the liability to be determined. The plain mean-

ing of the act is that the United States shall be

liable only if a private person would be liable in

like circumstances; but it remains for the court

11

to determine whether petitioner's claim is recog-

nizable in law. Cf, Peres vy. United States, 340

U.S. 135, 141. And apparently even petitioner

admits that a private person would not be liable

here for it concedes that its claim is a moral one,

rather than legal, and was ‘‘addressed to the

couseience of Congress” (Pet, 7). It is true of

) course that Congress may, by private legislation,

convert a moral into a legal obligation (Pope v.

United States, 323 U.S. 1. 9-10), but. in the ab-

sence of clear language or other manifestation of

legislative intent, private acts are not to be eon-

strued as creating a new cause of action where

none exists at law’ and this language of the private

act affirmatively demonstrates that such was not

intended.

The decision below did not deny that Congress

possesses power to create and confess liability, as

petitioner asserts and assumes (Pet. 16-17), but

the decision did deny that such power had here

“Stewart v. United States, 206 US. 185, 194; Tillson vy.

l'nited States, 100 U.S. 43; Massey v. United States, 198 P.

21 359 (CLA. 4); United States v. Durrance, supra: Kuhnert

Vv. United States, 127 F. 2d 824, 896 (CA. 8): Braden vy.

United States, 16 C. Cls. 389, 412.

SDs tN oh,

12

been exercised. In reaching that conclusion, the

court below adhered to and applied principles

which are well settled and which, in this instance

at least, require no further amplification or clari-

fication.”

(b) The legislative history of the private act

fails to disclose any congressional intention to

concede liability. On the contrary, it indicates

that Congress intended that petitioner have a day

in court on the merits and no more. A bill (H. R.

5543) conferring jurisdiction upon the Court of

Claims ‘‘to hear, determine and render judgment”’

on petitioner’s claim was first introduced in the

77th Congress.” It is important to observe that

“Cases holding that particular private acts did concede

liability, cited by petitioner (Pet. 16-17) as in conflict with the

decision below, are inapposite as they rest upon the distinctive

'sneuage of the particular acts involved or the legislative his-

tory of such acts.

™ Petitioner’s unsuccessful efforts to obtain a contract were

related to Congress in the remarks of Representative Hook

seven months before he introduced the bill. 87 Cong. Ree., pt.

1. pp. 297-302, 77th Cong., Ist Sess. (Jan. 24, 1941). There-

after, through a Resolution of Inquiry, Congress submitted a

series of questions to the War Department relating to peti-

tioner’s claim H.Res. 140, 77th Cong., Ist Sess. The answers

of the War Department, together with comments thereon by

petitioner’s president, are set forth in the congressional com-

mittee reports relating to the two private bills which were

subsequently introduced. See reports cited fn. 14, infra. In

June, 1941, the matter was also brought before the Special

Committee to Investigate the National Defense Program (the

‘‘Truman Committee’’). S. Rept. No. 480, Part 5, 77th Cong..

24 Sess., p. 63.

13

Section 3" of the bill barred the United States

from raising two substantive defenses therein

specified. The fact that two designated defenses—

‘ather than all—were barred, significantly indi-

cates under the rule of erpressio unius, exrclusio

alterius,that the draftsman’s intent that the merits

of the claim, not merely the question of damages,

were to be adjudicated. Both the Secretary of War

and the Attorney General, whose views on the pro-

posed bill were solicited by the Chairman of the

Committee on Claims, recommended against

enactment of the bill, the Secretary on the ground

that there was no legal basis for the claim,” the

Attorney General—refraining from discussing the

merits of the claim because he had no information

to guide him—on the ground, that it included a

‘provision which would waive substantive de-

fenses to a claim against the Government.’’* The

hill died in committee.

1! **See, 3. In the proceedings upon such claim before the

Court of Claims the United States shall not avail itself of the

defense that the officials of the United States, who were in-

volved in this transaction, acted without the authority of the

lnited States or that the Lenert Aircraft Corporation did not

have a flying model.’’

12 Letter dated December 9, 1941, of Henry L. Stimson, Sec-

retary of War, addressed to Hon. Dan R. McGehee, Chairman,

Committee on Claims. S. Rept. No. 909, 78th Con., 2d Sess..

on. 2-4; S. Rept. No. 1235, 79th Cong.. 2d Sess.. pp. 2-5.

18 The Attorney General also opposed provisions of the bill

reoniring that the damages include prospective profits and

interest on the claim. and waiving the form and content of

petitioner’s protest and withdrawal thereof. Letter dated

ero ey

Sie IN AW Rte Le te i

ee

14

Another bill (H.R. 3596) was introduced in the

78th Congress. Its wording was identical with that

of the previous bill with one notable exception,

viz., the new bill omitted the section which pro-

vided for the waiver of the Government’s substan-

tive defenses. The obvious implication is that the

draftsman had removed the waiver provision be-

cause of the opposition which the Attorney

(ieneral had previously expressed and that the

United States was to be free to raise whatever ce-

fenses it might have. The House Committee on

Claims recommended ‘favorable consideration to

the proposed bill giving the [petitioner] an

opportunity to be heard in the Court of Claims”’

(emphasis added). The bill was passed by both

houses of Congress but was pocket vetoed by

President Roosevelt.”

December 16, 1941, of Francis Biddle, Attorney General, ad-

ilressed to Hon. Dan. R. McGehee, Chairman, Committee on

Claims. S. Rept. No. 909, p. 4, supra; S. Rept. No. 1235, p. 5,

supra.

4 TI. Rept. No. 1145, 78th Cong., 2d Sess., p. 1. The Senate

Committee adopted the House Report. S. Rept. 909, 78th

Cong., 2d Sess. The same language appears in the Senate and

House Reports recommending enactment of the bill which be-

came Private Law 660. S. Rept. No. 1235, 79th Cong.. 2d

Sess., p. 2.

™ The President’s Memorandum of Disapproval states that

the bill would permit petitioner to sue the United States for

the failure of the War Department to award a contract; that

the act under which the competition was held does not require

the Secretary of War to award a contract to the lowest bidder

—

15

A third bill (H.R. 3094) was introduced the next

year in the 79th Congress. Its wording was essen-

tially the same as the first bill except (a) it omitted

the section waiving the Government’s substantive

defenses, but (b) it added new provisions ex-

pressly declaring that officials of the War De-

partment had acted illegally and without authority

in failing to evaluate petitioner’s design and in

contracting for planes which had theretofore been

in production instead of planes of a new design,

all in violation of the Air Corps Act. Recom-

mended favorably by the House Committee on

Claims" with only a slight amendment (striking a

provision for interest on the claim), the bill moved

to the Senate where it was altered substantially in

committee. Significantly, all references to the

supposed violation of the Air Corps Act and to the

alleged illegal conduct were stricken out. In their

place was inserted the present Section 2 declaring

that the United States shall be held liable for acts

but gives him discretion to consider the bids and select those

which in his judgment had won the competition; that the act

authorizes a participant in the competition to protest the

award; that although such protest was here filed and the See-

retary of War had found the protest to be without merit, the

protest was later voluntarily withdrawn; and that in these

circumstances ‘‘it is not sound policy to enact special legisla-

tion giving the company the right to sue in the Court of

Claims’’ H. Rept. No. 1064, 79th Cong.. Ist Sess., p. 5; S.

tept. No. 1235, 79th Cong., 2d Sess., p. 6; 90 Cong. Rec..

Mt. 5, p. 6713.

16 TI. Rept. No. 1064, 79th Cong., Ist Sess.

PRO RB NR IONE LE Ng IRIN YE HO SR Pr AM A:

16

of its employees “to the same extent as if the

United States were a private person.’ Also

stricken Was the provision as to the prospective

protits. With these amendments set forth with-

out comment, the Senate Committee on Claims

adopted the Llouse Report on the bill and reeom-

mended favorable action CS. Rept. No. 1235, 79th

FON eo had NE SH BB i met

‘ Cong., 2d Sess.). The bill was thereupon enacted

; inte law,

In summary, the legislative history discloses

; that the original bill intended that the merits of

; the claim be adjudicated by the Court of Claims

but that the respondent be barred from raising

; certain defenses. ‘The bar provision was later

deleted by the draftsman, apparently to meet the

objections of the Attorney General. When the )

President vetoed the second bill on the ground

that the denial of a contract to petitioner was not

improper, a third bill was introduced seeking an

express acknowledgment by Congress of the

legality of the conduet of War Department

officials, But Congress rejected this acknow-

wdgment and substituted a provision that the

respondent's liability be determined as would that

ofa private person. ‘Phat history, we submit. is

Wholly irreconcilable with petitioner's contention

that Congress intended te confess judgment and

merely have the court) assess damages. The

language of the Aet and its history compel the

vonelusion, correctly stated below, that Congress

WV

mteuded that the Court of Claims adjudicate the

question of liability. ‘This aspect of the decision

rests upon the wording of this one private. bill

and the particular circumstances attendant upon

it, It raises no problem common to other litiga-

tion and is not of such importance as to warrant

certiorari.

2. The holding below that no actionable wrong

Was committed against the petitioner was correct.

Despite petitioner's assertions to the contrary

(Pet. 3.17), the invitation to bid was not an offer

Which petitioner accepted and which thereby re-

sulted in a contract. ‘The Cireular Proposal

merely invited an offer: it was the petitioner who

Was the offeror, for it was petitioner who—through

submission of its design and bid——deseribed the

material offered and tixed the selling price. The

hid Was never accepted, hence no contraet was

vonstumiated and there could be no breach. Even

if petitioner's desigu had been adjudged the

Winner of the competition and the War Depart-

ment had nevertheless awarded a contract. te

another party, no cause of action would lie.

Martin ve United States, 61 CL Cls. 480. The

obstacles to the cause are (a) under the established

Army procurement: policy, petitioner's proposed

plane was ineligible for the quantity procurement

contract contemplated by the Cireular Proposal

CR. 45, 16,50); (hb) by refusing to submit a bid

on the sale of its design as distinguished from sale

4

&

Hf

Pb settw dha oe ee,

Oe RE Ee IO

18

of the planes, petitioner failed to comply with an

explicit condition of the Circular Proposal (R.

44); and (c) the Secretary of War was under no

legal obligation to award any contract—under the

Air Corps Act he is *‘authorized’’, not required,

to contract with the winner (10 U.S.C. 310 (c¢),

(f))."

Nor was an actionable wrong committed when

the War Department subsequently refused to

award a negotiated experimental contract to peti-

tioner under Section 10(k) of the Air Corps Act

(10 U.S.C. 310(k)). Apart from the fact that

Private Law 660 limited the court’s jurisdiction

to the claim based upon the refusal of a contract

under the design competition, the action of the

Secretary of War under that section is purely dis-

cretionary, and normally is not reviewable by the

courts. Cf. Louisiana vy. McAdoo, 234 U.S. 627,

' These factors distinguish this case from Minton v. F. G.

Nmith Piano Co., 36 App. D.C. 137 (Pet. 17), where defend-

ant unqualifiedly offered a prize to the person who correctly

counted the dots in an advertisement; plaintiff did so and the

court held there had been an offer, an acceptance and a bind-

ing contract. These factors, too, remove this case from the

rules which apply when one party to an existing contract

prevents the happening of a condition precedent, discussed

in petitioner’s other citations (Pet. 18). Here, there was no

existing contract. If there was, petitioner’s ineligibility for

the contemplated quantity contract nullified the effect of the

happening of the condition precedent (7.¢e., winning the design

competition). In any event, petitioner’s damages were too

speculative to support a judgment, for the reasons indicated

in the decision below (R. 59).

—

19

633. No abuse of discretion was shown: peti-

tioner’s plant and personnel were reported defi-

cient after each of four different inspections, and,

as the court below found with regard to the design

competition (R. 54, 57), it is unthinkable that in

a crucial period of the country’s defenses the War

Department would be expected to award a quantity

contract for a plane which existed only on blue

prints.

CONCLUSION

This case involves no question of general im-

portance and there is no conflict. In dismissing

the cause, the court below correctly applied well

established legal principles to the particular cir-

cumstances presented. It is respectfully sub-

mitted that the petition for a writ of certiorari

should therefore be denied.

Ropert L. STERN,

Acting Solicitor General.

Hou_MEs BALpRIDGE,

Assistant Attorney General.

SAMUEL D. SLape,

LFsTER S. JAYSON,

Attorneys.

OcTOBER, 1952.

Gp meee maar canoe EN A Ian a A END Bi igen De I

0) aeel$.00 hia:

APPENDIX

Private Law 660, 79th Cong., 2d Sess., 60 Stat.

1227, approved June 15, 1946, provides:

An Act

Conferring jurisdiction upon the Court of

Claims of the United States to consider and

render judgment on the claim of the Zephyr

Aireraft Corporation against the United

States.

Be it enacted by the Senate and House of

Representatives of the United States of

America in Congress assembled, That juris-

diction is hereby conferred upon the Court

of Claims of the United States to hear, deter-

mine, and render judgment on the claim of the

Zephyr Aircraft Corporation, as successor to

the Lenert Aircraft Corporation, against the

United States for compensation for damage,

injury, and losses suffered by the said Lenert

Aircraft Corporation, because of the refusal

by officials of the War Department to make a

contract with the said Lenert Aircraft Cor-

poration in compliance with section 10 of the

Act of July 2, 1926 (44 Stat. 784), pursuant

to a design competition for the procurement

of primary training planes, which was pro-

jected by circular proposal 39-635, dated

March 11, 1939.

aoe

21

Sec. 2. In the determination of such claim,

the United States shall be held liable for

damages, and for any acts committed by any

of its officers or employees, to the same ex-

tent as if the United States were a private

person.

Sec. 3. Suit upon this claim may be insti-

tuted at any time within one year after the

passage of this Act, notwithstanding the lapse

of time, laches, the form and content of pro-

test, and supporting papers thereof. Pro-

ceedings upon the determination of such

claim and appeals from the payment of any

judgment thereon, shall be in the same

manner as in the case of claims over which the

court has jurisdiction under section 145 of the

Judicial Code as amended.

Approved June 15, 1946.

¥RU.S. GOVERNMENT PRINTING OFFICE 1952—227587/P.0.568