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MINE SAFETY APPLIANCES CO. v. KNOX

March 15, 1945

MINE SAFETY APPLIANCES CO.
v.
KNOX, Secretary of the Navy, et al.



The opinion of the court was delivered by: MCGUIRE

The plaintiff Mine Safety Appliances Company is a corporation engaged in the manufacturing, selling, exporting, and installing throughout the United States and elsewhere, mining and industrial equipment and protective apparatus for the protection of life and property.

 For several years past the company, both as a prime contractor and as a sub-contractor has secured so-called war contracts, presumably subject to the provisions of the Renegotiation Act. 50 U.S.C.A.Appendix 1191.

 On March 4, 1944, the defendant Forrestal as Under Secretary of the Navy, acting under authority of the Act, made a unilateral order requiring the company to eliminate excessive profits for its fiscal year ending December 31, 1941, and December 31, 1942. The order provided in part as follows: 'Unless action is taken by you not later than March 8, 1944, to eliminate said excessive profits in a manner satisfactory to me, appropriate action will be taken by me, without further notice to you, to eliminate said amount of excessive profits * * * by directing the withholding of amounts otherwise due to you as a contractor * * * .'

 The plaintiff company failed and refused to comply with the order and on March 8, 1944, filed the complaint herein which prayed for an injunction to restrain the defendant from:

 '(1) Withholding or instructing or requesting the United States, or any instrumentality, agency, officer, or agent of the United States to withhold any monies due, or to become due to plaintiff from the United States or any agency or instrumentality thereof;

 '(2) Instructing or requesting any prime contractor or subcontractor or officer, employee or agent thereof, to withhold any monies due or to become due to plaintiff from such prime contractor;

 '(3) From further proceeding in any manner to renegotiate or refix contract prices with respect to materials and supplies furnished or to be furnished by plaintiff;

 '(4) From proceeding in any manner directly or indirectly, to enforce or attempt to enforce the determination and order of March 4, 1944, whether by methods of enforcement sought to be provided by said Renegotiation Act, or by any other method.'

 The complaint further prayed that a special court of three judges be constituted and that upon final hearing the court order, adjudge and decree that the Renegotiation Act is unconstitutional, null and void, and unenforceable against the plaintiff.

 After the complaint had been served the parties entered into a stipulation as follows: 'Defendants will cause the Navy Department to suspend payment, pending final determination of this action by the Court of last resort, of vouchers otherwise payable by the Navy Department to the plaintiff * * * up to the sum of $ 1,050,000 (subject to adjustment upon further calculation by the Navy Department) for the purpose of securing payment to the United States of the amount as determined by the Under Secretary of the Navy to be excessive profits as appears from his written determination of March 4, 1944 * * * Plaintiff consents to such suspension until final determination of this action by the Court of last resort.

 '(2) In all other respects defendants will cause to be stayed action to eliminate said amount of excessive profits pending the final determination of this action by the Court of last resort, and in particular no action to enforce the terms of said determination of March 4, 1944 * * * .

 '(3) Plaintiffs will not apply to the court for any interlocutory injunction, restraining order, or other temporary or intermediate injunctive relief pending the final determination of this action by the Court of last resort * * * .

 '(4) By entering into this stipulation neither of the parties hereto make or shall be deemed to make any admissions with respect to their rights or claims, it being understood by the parties hereto that this agreement shall be without prejudice to their substantive rights.'

 Thereafter the Navy Department suspended payment to the plaintiff on vouchers submitted with respect to contracts performed by the company, and which were otherwise payable, in the amount of $ 1,014,873.78, which sum is being held as an obligated but unexpended balance in the particular appropriation account of the Navy Department applicable to the various accounts of the plaintiff. The practical effect of this is that the total of suspended payments is being held by the Treasury of the United States as an ...


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