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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for a Writ of Certiorari
- **Published:** January 1, 1952
- **Citation:** 344 U.S. 878

## Text

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

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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

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_——
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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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

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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.’’

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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

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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

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_1373%3A1. Public record. Not legal advice.