John W. WARNER, Secretary of the Navy, et al., Petitioners,
v.
Honorable W. Harold COX, United States District Judge for
the Southern District of Mississippi, Respondent.
On Petition for Writ of Mandamus or Prohibition LITTON
SYSTEMS, INC., Plaintiff-Appellee,
v.
Thе Honorable John W. WARNER, Secretary of the Navy, et al.,
Defendants-Appellants.
Nos. 73-1627, 73-2275.
United States Court of Appeals,
Fifth Circuit.
Jan. 11, 1974.
Morton Hollander, William D. Appler, Dept. of Justice, Washington, D. C., Robert E. Hauberg, U. S. Atty., Joseph E. Brough, Asst. U. S. Atty., Jackson, Miss., Albert C. Kornblum, Asst. Gen. Counsel, Dept. of the Navy, Washington, D. C., Raymond D. Battocchi, Dept. of Justice, Washington, D. C., for defendants-appellants.
W. Harold Cox, U. S. Dist. Judge, Jackson, Miss., Robert L. Ackerly, Herbert L. Fenster, Washington, D. C., W. Timothy Jonеs, E. L. Brunini, Jackson, Miss., for plaintiff-appellee.
Before BROWN, Chief Judge, and RONEY and GEE, Circuit Judges.
GEE, Circuit Judge:
On May 1, 1969, Appellee, Litton Systems, Inc. (Litton), and the Navy Department executed a multi-billion dollar contract for the procurement of five large ships, each about the size of an aircraft carrier, described as Landing Helicopter Assault Vessels (LHA). The contract's novel concept, and at least a remote if not a proximate cause of this suit, was "total package procurement." Litton was not only to construct but to design the vessels, a departure from received procurement wisdom.
Litton's design responsibility entailed a substantial paper-work phase preceding any hardware рroduction, thus requiring modification of the Navy's standard "per cent of physical completion" payment clause. In so doing, the scriveners fathered what we may charitably call a hybrid: for the first forty months, a period deemed sufficient for completion of design and a good start on production, Litton was to be reimbursed weekly for its actual costs incurred; thereafter, payment was to be made upon the conventional percentage-of-completion plan. Transition from one payment plan to another was to be accomplished by determining the amount which would have been due on a percentage-of-completion basis at the end of the initial forty-month period and comparing it with actual payments made to Litton. Any overage was to be refunded by Litton under an arrangement, apparently intended as an exclusive remedy, whereby Litton would continue work without pay for a period not exceeding three months and would then repay in cash any amount remaining due after credit for the unpaid work.
At thе end of the initial period and one agreed six-month extension, the officer in charge of the contract for the Navy (contracting officer) denied any further extension of the cost refund program, thus placing payment on a percentage-of-completion basis, and determined that at the point of transition Litton had received nеarly fifty-five million dollars in overpayments. Litton promptly took an administrative appeal to the Armed Services Board of Contract Appeals, where it pends. At about the same time, Litton applied to a different official, the financing officer, for an unrelated administrative remedy, deferment of the repayment until the contract appeal fixed its amount. This remedy, founded in regulations of general application1 and not in the text of the contract, but similar or identical in effect to the extension sought of the contracting officer, was also denied. Litton sued in United States District Court to reverse this denial, asserting that the financing officer had violated various regulations in ruling adversely on its request for deferred payment. Jurisdiction was pleaded in the federal question, mandamus and declaratory judgment statutes (28 U.S.C. 1331, 1361, 2201-2202) and in the Administrative Procedure Act (5 U.S.C. 702-706). The United States resisted, asserting mandatory and exclusive jurisdiction in the Court of Claims under the Tucker Act.
The court below ruled it had federal question and Administrative Procedure Act (APA) jurisdiction, concludеd that the Navy had indeed transgressed various procurement regulations, and entered an injunction obliquely ordering the defendants to continue to pay Litton's vouchers currently,2 an expenditure averaging approximately three million dollars per week. This appeal and a petition for writ of mandamus or prohibition to confine the cоurt below to its jurisdiction followed, were heard and will be decided together. After argument of this case, we stayed the district court injunction pending our decision on the merits. We now reverse.
This is a suit against the United States, though in form against its ministers, Dugan v. Rank,
Litton virtually conceded at oral argument that jurisdiction in the district court must stand on the APA or fall.3 In the view which we take of the case, a correct resolution of the issues raised by the briefs of soveriegn immunity and its waiver vel non, of the extent to which the APA is to be deemed a grant of jurisdiction, and of the interplay of the APA and the Tucker Act4 commences and virtually ends with analysis and characterization of Litton's claim and of the relief Litton seeks and has received from the district court. Once this claim is properly identified, thе rest becomes plain.
None of the substantive claims presented to the court below concerned anything but the payment of money-when, how much, and by whom it should be paid. The government contends that all were founded solely in Litton's express contract with the United States, and that it has consented to be sued ex contractu only in the Court of Claims under the Tucker Act. Litton urges that its sole claim below was for review of administrative errors committed in the process of refusing a deferred payment agreement, noting that such agreements have their source in general procurement regulations rather than in this contract. It points out in this connection that the more distinctively contract clаims-the amount of the overpayment and termination of the cost reimbursement scheme of payment-are already on administrative appeal and ". . . are not before the District Court." (emphasis Litton's)
The court below adopted Litton's view:
This suit against these government officials in their official capacity is undeniably a suit against the United States, but it is not for the recovery of any monеy from the United States or the Defendants. The sole purpose of this suit is for a review of the administrative actions of these defendants in arbitrarily and capriciously denying deferment of the immediate payment of approximately $54,660,000 as advancements or payments in that amount in excess of the amount payable under progress estimates undеr the contract. (emphasis the court's)
So reasoning, the court entered an order5 directing the United States (not to refuse) to pay Litton's multi-million dollar weekly vouchers. The sovereign was thus directed by the district court to pay money claims which, on the face of the contract, it had a clear right to refuse. The effect of the district court's order was to extend indefinitely the operatiоn of the cost-reimbursement clause of the contract, a matter directly before the Armed Services Board of Contract Appeals but undecided at the time of the court's order and one which will presumably make its way to the Court of Claims if the contractor is dissatisfied by the appeal board's decision of it. S. & E. Contractors v. United States,
In the first place, the APA does not provide for review under such circumstances. Specifically exempted from review is agency action for which there is some ". . . other adequate remedy in a court." 5 U.S.C. Sec. 704. Suit under the Tucker Act in the Court of Claims has been held such an adequate remedy. Mohawk Airlines, Inc. v. CAB,
Second, the APA is not a waiver of sovereign immunity in this case. Although some circuit courts, including this one, have seen in the APA a broad and general waiver of sovereign immunity in cases to which it applies,8 none has yet extended this to suits seeking money damages against the United States. See Scanwell Laboratories, Inc. v. Shaffer,
We recognize the force of Litton's contrary characterization of the case as one in which only review of improper agency action in refusing a deferred payment agreement is sought, action arguably not otherwise reviewable in any court. But we are persuaded that, where the only purpose and sole effect of permitting such a review in the district court is what amounts to a money judgment against the Unitеd States vastly exceeding that court's Tucker Act jurisdiction, implemented by equitable powers which neither the Court of Claims nor the district court itself sitting as a Court of Claims under the Tucker Act10 could exercise in such a case, the district court is exercising jurisdiction which Congress never intended to and never did confer upon it. Apprehending the theoretical distinction made by Litton, then, we find it too much at war with our appreciation of Congress' purpose in passing the Tucker Act to be accepted as controlling here.
Situations may well arise in which the district court has and should exercise jurisdiction, grounded in some statute other than the Tucker Act, to grant injunctive relief having the incidental effect of rеquiring payments to be made by the United States. National Helium Corporation v. Morton,
We answer: fairly and centrally presented in National Helium was a national policy hаving no necessary connection with the payment of money, a policy mandatorily enjoined upon the Secretary by NEPA and plainly disregarded by him in a matter having arguably irremediable consequences. Present also was one of the classic exceptions to sovereign immunity, action by the minister beyond his powers. The court's opinion plаces jurisdiction squarely upon the NEPA.11 Nor were any characteristic contract issues involved. The Secretary's power to end the contract, under its terms and as a matter of contract law, was seemingly undisputed. Nor was any claim for money due and unpaid ripe for suit under the Tucker Act.
In our case, to the contrary, the sole congressional policy involved is purely monetary, that the United States should fairly handle its financial obligations in the defense procurement area. An elaborate system of administrative appeals and interim relief has been devised, with the Court of Claims available to resolve all at the end should this be required. Litton would have us hold that, under the APA, jurisdiction exists beсause the Court of Claims cannot grant the interim relief it has gotten from the district court and thus it has no "adequate remedy in a court." 5 U.S.C. Sec. 704. We decline to do so. Congress established the Court of Claims to determine claims of this type and magnitude but deliberately withheld equitable powers from it.12 Since the United States by reason of its nature acts only through agents, it is hаrd to conceive of a claim falling no matter how squarely within the Tucker Act which could not be urged to involve as well agency error subject to review under the APA. Little imagination is needed to foresee the consequences of a holding that such claims as this may be reviewed either in a court having power to grant equitable relief against the United States or in one having none. We refuse to believe that Congress intended, in enacting the APA, so to destroy the Court of Claims by implication.
Our conclusion is strengthened by considering the posture of this very case. As noted above and emphasized by Litton, parts of this controversy were not before the district court and, of course, are not before us. The Armed Services Board of Contract Appeals is presently considering Litton's appeal of the contracting officer's decision of the amount overpaid and the propriety of his refusal to extend further the cost-refund scheme of payment. Appeal lies from that board to the Court of Claims. Our district court has undertaken to rule оn the propriety of the financing officer's refusal to grant a deferred payment agreement, relief essentially identical in effect to that sought of the contracting officer. It is entirely settled that collateral estoppel exists between the district court and the Court of Claims, e. g., Carter v. Seamans,
The order of the court below is vacated, and the cause is remanded with instructions to dismiss it for want of jurisdiction. The petition for writ of mandamus or prohibition is dismissed аs moot, in view of our disposition of the appeal.
Vacated and remanded.
Notes
Armed Services Procurement Regulations E-614, 616, 32 C.F.R. 163.112, 163.114
In form, the order restrained defendants from recouping the ascertained $55 million overpayment by any means, including ". . . refusing to honor Plaintiff's invoices properly prepared on the basis which has heretofore been employed."
Carter v. Seamans,
28 U.S.C. Secs. 1346, 1491
In form, a temporary restraining order, but in fact, an injunction
Richardson v. Morris,
Special situations have, instead, been specially dealt with, vide the Lockheed loan guarantee
See, e. g., United States v. Joseph G. Moretti, Inc.,
Other circuits have adopted the view that the APA is not a waiver of soverеign immunity. See Twin Cities Chippewa Tribal Council v. Minnesota Chippewa Tribe,
The Supreme Court, viewing from afar the struggle within and among the circuits, has omitted even the mention of the doctrine in recent decisions that offered opportunities to resolve the conflict. See, e. g., Citizens to Preserve Overton Park, Inc. v. Volpe,
This holding disposes of the other basis of jurisdiction advanced. See fn. 3 supra
See Richardson v. Morris,
"It is the Secretary's violation of or failure to comply with the mandate of the Environmentаl Protection Act which furnishes a jurisdictional basis."
The Tenth Circuit, in its opinion on a later appeal of the case, confirms our understanding of the jurisdictional basis upon which it placed its decision:
"Thus, we conceive of the review of the Secretary's action as being strictly limited to compliance with the requirement of the environmental impact statement . . . We reject the plaintiff's argument that review of the termination is permissible under the Administrative Procedure Act." National Helium Corp. v. Morton,
Without necessarily endorsing our sister circuit's conclusion, we note only that their decision is in no sense one which intrudes upon Court of Claims jurisdiction in a case such as the instant one, where the APA is advanced as an alternative basis for district court jurisdiction of a claim falling fairly within the Tucker Act.
Richardson v. Morris,