The Government says that when these concerns to which the withholding orders were directed, withhold and pay over to the United States a sum otherwise due the plaintiff, the plaintiff can sue that concern in a common-law action for the amount due upon its subcontract. It says that in such a civil action the plaintiff could assert the invalidity of the withholding order upon which the withholding concern purported to act. It says that the Government would then intervene and thus bear the burden of establishing the validity of its withholding orders. To this contention the plaintiff replies (1) that the bringing of such suits against its customers would result in irreparable damage to it, because customers in a competitive market will not deal with concerns when such dealing will result in the expense, annoyance and publicity of law suits; and (2) that the procedure suggested by the Government would merely result in a multiplicity of suits with no possible advantage to any party over the simple procedure of a single suit possible under the equity power of injunction.
There is some merit to the plaintiff's first contention. Undoubtedly customers would dislike being the defendants in law suits in which they had no interest. Moreover, if they obeyed the withholding order and turned over to the Government amounts otherwise due the plaintiff, and the plaintiff recovered in the civil action, these concerns would be compelled to seek recovery from the Government, a complication which they probably would choose to avoid.
The plaintiff's second contention, however, appeals to us as being conclusive of the matter immediately before us. The addresses of the 123 concerns as shown on the withholding orders, indicate that suits against the 12 would have to be brought in seven different district courts (eight different divisions), if they were filed, as presumably they would be, in federal courts. Otherwise, of course, they would be brought in different state courts, probably eight, in five different states.
Moreover, the plaintiff would have to protect itself from time to time against the expiration of the statute of limitations upon amounts due it from these concerns during the course of any litigation pursued as a test case to its final conclusion. Such a test case might conceivably last for several years. So that the plaintiff would probably be required to bring several civil actions against each of these concerns in order to protect its rights to recover, if it should eventually succeed in the principal litigation.
We do not think that the United States is an indispensable party to a civil action involving only the statutory power of a named official to pursue a certain method of recovery of sums alleged to be due the United States. The question is solely the statutory power of a particular official to do a particular act. The money involved is not in the possession of the United States. The right of the United States to recover the money is not involved. The question is the exceedingly narrow one of the extent of the statutory power of the particular official, and the meaning of the statutory provision which confers power upon him.
The Government answers the contention as to the multiplicity of suits by asserting that it would intervene in the civil actions brought by plaintiff against these 12 concerns, and would pursue one of the cases to a final conclusion and would deem itself thereafter bound by the decision in that particular litigation. We cannot give weight to the assertion thus made. In the first place, it is not made with such authority and with such concreteness as to form a premise for action of the court. Section 403(c)(4) of the Act
gives the Secretary power to make binding agreements for the elimination of excessive profits and for the discharge of any liability for such profits. But no such agreement is presented for our consideration. The assertion made to us is merely a declaration of present intentions on the part of the Secretary, made by his counsel in court. In the second place, a successor might deny the present Secretary's power to bind the Government irrevocably to such a course of action. If a successor in office should be of opinion that the agreed course of action was improper, it might very well be that he would attempt to pursue such course as he deemed proper. In the third place, it is common knowledge that the Government does not deem itself irrevocably bound by any one decision but, on the contrary, attempts repeatedly to re-litigate equestions upon which it considers an erroneous answer has been reached by the courts. Examples of repeated relitigations of disputed questions are easily found.
In the fourth place, the Supreme Court itself encourages the re-litigation of questions in the different circuits. It expressly recites in its Rules that one of the ordinary bases for a grant of certiorari is a conflict among the Circuit Courts of Appeals,
and the Government frequently relitigates a question in a different circuit when it has once received an adverse decision in one circuit and failed to secure a writ of certiorari in the first case.
That equity has jurisdiction to avoid a multiplicity of suits is an exceedingly practical doctrine. Necessity of litigating the same question between the same parties many times is such a waste, both on the part of the adversaries and on the part of the courts, as to constitute per se inadequacy of remedy.
It seems to us that the legal remedies available to the plaintiff, by way of a multiplicity of actions against different scattered customers, are speculative, inconvenient and inefficient. Plaintiff cannot, we believe, as adequately protects its rights in that piecemeal fashion as it can by a single proceeding in equity
Whether, as an abstract proposition, multiplicity of suits will alone support equity jurisdiction is subject to some differences of opinion. But it is agreed that where the parties to all the possible actions are the same, and all the actions involve the same question of law or fact, equity has power to effect relief.
There is no material difference, so far as the doctrine is concerned, between a case where the parties are the same and one where the actual parties in interest are the same and only nominal parties, stakeholders, are different. The parties at interest here are the plaintiff and the Secretary. The various concerns which are the addressees of the withholding orders and which would be the nominal defendants in the other suggested actions, are bystanders with no real interest. Plaintiff's remedy at law lies in suing one by one these 12 concerns. Such a defendant, being a completely impartial and disinterested stakeholder, could by way of a bill of interpleader in a federal court of equity of proper jurisdiction bring these two real parties at interest together in one suit.
Plaintiff could accomplish the same end by bringing suit in equity against the Secretary directly, even though it might be necessary to name the customer as a co-defendant. Equity abhors circuity of action and will make that party immediately liable who is ultimately liable at law.
Some authority is found for the proposition that one of the requisites of such a bill of peace is that plaintiff first establish his legal right in an action at law. Examination of the cases cited, however, shows either that the relief sought was the quieting of title to real estate
or the enjoining of the collection of an allegedly illegal tax
(both of which instances demand particular caution on the part of an equity court), or that the statement relied upon was pur dictum.
It is true that a mere theoretical inadequacy of the legal remedy due to multiplicity of suits may find an equity court refusing to exercise its power. Each case must be decided upon its own merits and the convenience to the other parties.
So far as the present proceeding is concerned, there is no disadvantage to any party of interest, or to the courts, in litigating the controversy were resolved in the present proceeding. Not only would he be required to appear but once, but the place of the proceeding is at the location of his headquarters where his staff has its offices. The present court is in practical effect the same as the courts which would probably entertain the other type of law suit. All are federal courts. If there was any advantage or disadvantage in the old separation between the equity court and the court of law, it has been wiped out by the elimination of the difference in the federal system. All rights involved can be protected as well in this present suit as in the many separate actions. Every practical consideration supports the disposition of the controversy in a single proceeding rather than in a multiplicity of suits.
It is also said that plaintiff can prevent any irreparable damage and likewise prevent a multiplicity of suits by paying the amount of the Government's claim and bringing suit to recover. By so doing, plaintiff would eliminate any rights which it may have to test the validity of the collection process which the Secretary is now pursuing by these withholding orders. Plaintiff would be required to concede, in effect, the very question which it raises. We do not think that he can be compelled to forego his contest, or that the legal remedy which would ensue to him can be termed adequate. It would not preserve to him the right which he asserts, even if that right be valid.
For all the foregoing reasons, we are of opinion that this court has jurisdiction of this proceeding (No. 36572) to the extent that it relates to the validity of the withholding orders already issued and to be issued by the Secretary under the asserted authority of Section 403(c)(2) of the Act. The motion to dismiss the action for lack of jurisdiction is, therefore, denied.
Counsel will prepare and present appropriate orders in accordance with this memorandum. They will also indicate to the court an early date, convenient to those necessarily involved, at which further and final presentation of evidence and argument in Civil Action No. 36572 may be made upon the issue to which that proceeding is now limited.
Mr. Justice Morris is of opinion that the motion to dismiss in No. 36572 should be granted, and has stated his views upon that question in a separate memorandum filed simultaneously herewith.