1. In a suit brought by a government contractor in the form of a
suit against the Under Secretary of the Navy as an individual, and
not as an officer of the Government, but the sole purpose of which
is to prevent him from taking action under the Renegotiation Act to
stop payment of money by the Government to satisfy the
Government's, and not the Under Secretary's, debt, the United
States is an indispensable party. P. 326 U. S.
2. Such a suit was properly dismissed, even though it challenged
the constitutionality of the Renegotiation Act, because it was a
suit against the United States to which the sovereign had not
consented. Section 403(e) of the Renegotiation Act applied. P.
326 U. S.
59 F. Supp. 733 affirmed.
Appeal from an order of a three-judge district court dismissing,
as a suit against the United States to which the sovereign had not
consented, a complaint against the Under Secretary of the Navy
seeking an injunction and a declaratory judgment holding the
Renegotiation Act unconstitutional.
MR. JUSTICE BLACK delivered the opinion of the Court.
After an investigation in which appellant appeared, appellee
James V. Forrestal, while Under Secretary of the Navy, determined
that the appellant had received a large
Page 326 U. S. 372
amount of excessive profits on government war contracts within
the meaning of the Renegotiation Act. [Footnote 1
] Pursuant to the powers given him by that Act,
the appellee notified appellant that, unless appellant took action
to eliminate these profits, the Under Secretary would direct
government disbursing officers to withhold payments due appellant
on other contracts sufficient in amount to offset the government's
loss due to the excessive profits. [Footnote 2
] Section 403(e) of the Renegotiation Act
provides that any contractor aggrieved by the Secretary's
determination may, within ninety days, apply to the Tax Court for a
trial and adjudication of the issue. The section
provides that the Tax Court
"shall have exclusive jurisdiction . . . to finally determine
the amount . . . , and such determination shall not be reviewed or
redetermined by any court or agency."
58 Stat. 86. The appellant, without following the procedure
provided for in Section 403(e), filed this complaint in the
District Court. The complaint seeks an injunction and declaratory
judgment. It alleges, among other things, that the Act is
unconstitutional on many grounds; that withholding payment of the
sums found to represent excessive profits would seriously interfere
with appellant's operations and with production of critical
materials for the government; that, due to statutes and executive
orders which make many of the appellant's contracts confidential
and secret, it will be impossible for it to carry on proceedings to
enforce its contract rights until these restrictions are lifted,
and that it is without
Page 326 U. S. 373
a plain, adequate, and complete remedy at law. [Footnote 3
] The District Court composed of
three judges dismissed the complaint as a suit against the United
States to which the sovereign had not consented, 59 F. Supp. 733,
and the case comes before us on direct appeal. 28 U.S.C. § 380a.
Here, government counsel, appearing for the Secretary, advance the
District Court's grounds and contend further that the judgment
below be affirmed because appellant failed to exhaust its
administrative remedy and to follow the statutory procedure in not
first going before the Tax Court to which Congress has granted
"exclusive" jurisdiction, and because it does not appear that
appellant is without an adequate legal remedy.
We think the government is an indispensable party in this case,
and, since it has not consented to be sued in the District Court in
this type of proceeding, the complaint was properly dismissed
against the government officer. Minnesota v. United
States, 305 U. S. 382
Stanley v. Schwalby, 162 U. S. 255
Appellant contends that the action seeks to prevent a tort by the
Secretary, acting as an individual and not as an officer of the
government, consisting of a trespass against appellant's property.
and that equitable relief is necessary because appellant has no
adequate remedy at law and since it would otherwise suffer
irreparable loss. Under our former decisions, had the factual
allegations supported these contentions, the complaint
Page 326 U. S. 374
as filed would, in the absence of any further proceedings, have
provided a basis for the equitable relief sought. See e.g.,
Philadelphia Company v. Stimson, 223 U.
, 223 U. S.
-620. For, according to these cases, if we assume, as
we must for the purpose of disposing of the jurisdictional issue,
that appellant's allegations, including the one that the
Renegotiation Act is unconstitutional, are true, the fact that the
Secretary had acted pursuant to the command of that statute would
have made no difference. These cases hold that a public officer
cannot justify a trespass against a person's property by invoking
the command of an unconstitutional statute. Under such
circumstances, the tort becomes the officer's individual
responsibility, and the government is not held to have sufficient
interest in the controversy to be considered an indispensable
party. But the government does not lack such interest in all cases
where the suit is nominally against the officer as an individual.
The government's interest must be determined in each case "by the
essential nature and effect of the proceeding, as it appears from
the entire record." Ex parte New York, 256 U.
, 256 U. S.
Here, the essential allegations and the relief sought do not
make out a threatened trespass against any property in the
possession of or belonging to the appellant. Nor does the record
present any other circumstances that would make the Secretary
suable as an individual in this proceeding. Certainly the action
which the Secretary proposed to take is not a violation of any
express command of Congress. Cf. Rolston v. Missouri Fund
Comm'rs, 120 U. S. 390
120 U. S. 411
Houston v. Ormes, 252 U. S. 469
Smith v. Jackson, 246 U. S. 388
sole purpose of this proceeding is to prevent the Secretary from
taking certain action which would stop payment by the government of
money lawfully in the United States Treasury to satisfy the
government's, and not the Secretary's, debt to the appellant. The
assumption underlying this action
Page 326 U. S. 375
is that, if the relief prayed for is granted, the government
will pay, and thus relinquish ownership and possession of the
money. In effect, therefore, this is an indirect effort to collect
a debt allegedly owed by the government in a proceeding to which
the government has not consented. The underlying basis for the
relief asked is the alleged unconstitutionality of the
Renegotiation Act, [Footnote 4
and the sole purpose of the proceeding is to fix the government's,
and not the Secretary's, liability. Thus, though appellant denies
it, the conclusion is inescapable that the suit is essentially one
designed to reach money which the government owns. Under these
circumstances, the government is an indispensable party,
Minnesota v. United States, 305 U.
, 305 U. S. 386
even though the Renegotiation Act under which the Secretary
proposed to act might be held unconstitutional. Louisiana ex
rel. Elliot v. Junel, 107 U. S. 711
Cunningham v. Macon & Brunswick R. Co., 109 U.
; Hagood v. Southern, 117 U. S.
, 117 U. S. 67
In re Ayers, 123 U. S. 443
123 U. S.
-497, 123 U. S.
-507; Pennoyer v. McConnaughy, 140 U. S.
, 140 U. S. 9
Wells v. Roper, 246 U. S. 335
246 U. S. 337
see also N.Y. Guarantee and Indemnity Co. v. Steele,
134 U. S. 230
short, the government's liability cannot be tried "behind its
back." Louisiana v. Garfield, 211 U. S.
, 211 U. S. 78
MR. JUSTICE REED concurs in the result for the reason that he
thinks no adequate ground is alleged for an injunction. In his
view, a legal remedy exists in the Court of Claims, since objection
to the amount of excess profits is waived and the stipulation
referred to in the opinion removes multiplicity of actions for
relief as a possible ground.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
56 Stat. 226, 245; 56 Stat. 798, 982; 57 Stat. 347; 57 Stat.
564; 58 Stat. 21, 78.
Section 403(c)(2) of the Renegotiation Act authorizes and
directs the Secretary to eliminate excessive profits by, among
other things, "withholding from amounts otherwise due to the
contractor any amount of such excessive profits."
Appellant also alleged below that the Secretary had threatened
to instruct other contractors to withhold any moneys due to
appellant. A stipulation and affidavit by the parties reveal,
however, that this action will in fact not be taken. Any
controversy that might have been before the court by virtue of this
allegation has thus become moot. It can therefore not serve as the
basis for the court's consideration of the constitutional and other
questions here in issue. United States v. Alaska Steamship
Co., 253 U. S. 113
Commercial Cable Co. v. Burleson, 250 U.
; Montgomery Ward & Co. v. United
326 U.S. 690. Cf. Coffman v. Breeze
Corporations, 323 U. S. 316
This is seen from the prayer for a declaratory judgment, which
asks only that the Renegotiation Act be held unconstitutional.