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WARNER CONST. CO. v. KRUG

June 25, 1948

WARNER CONST. CO.
v.
KRUG, Secretary of the Interior, et al.



The opinion of the court was delivered by: HOLTZOFF

This is an action brought by the Warner Construction Company against Julius A. Krug, Secretary of the Interior, and the United States of America for equitable relief under Section 1 of the Act of August 7, 1946, which authorizes Government departments and agencies to adjust and settle equitable claims of Government contractors for losses incurred by them between September 16, 1940, and August 14, 1945. *fn1"

Both defendants move for summary judgment, and in addition the United States of America moves to dismiss the complaint.

 Section 3 of the Act of August 7, 1946, however, contains the following provision:

 ' * * * a previous settlement under the First War Powers Act, of 1941, or the Contract Settlement Act of 1944, shall not operate to preclude further relief otherwise allowable under this Act.'

 It is contended by the plaintiff that this provision waives the bar of the previous settlement and relinquishes the rights of the government under the general release. Obviously the Congress has the right to waive a release in behalf of the Government. It would seem under a literal construction of this provision that his is just what the Congress did.

 The Government argues, however, that the term 'settlement' should be limited to a unilateral adjustment made by a government agency, and does not extend to an agreement or settlement embodied in a contract. In other words, the Government urges that if the administrative agency had settled or adjusted the claim, such settlement would not have precluded further relief, but that because the settlement was embodied in a bilateral contract or agreement, which included a release, the binding effect of the settlement is not waived by the Act of Congress.

 The Court is unable to find a tenable basis for the distinction which the Government seeks to draw. The statute is clear and unambiguous. It provides that a previous settlement under a prior statute shall not operate to preclude further relief otherwise allowable under the Act of 1946. A settlement consummated by a bilateral agreement is as much a settlement as is a unilateral adjustment or allowance of a claim. The term 'settlement' covers both methods of adjusting a claim. *fn2" It is obvious to the Court that it was the intention of the Congress, by the Act of August 7, 1946, to authorize Government agencies to make adjustments of claims, in addition to any adjustment which had been previously made. Moreover, a judicial review was accorded by the 1946 Act, which had not been contained in the First War Powers Act

 It is claimed by Government counsel it was the intention of the Congress in passing the Act of August 7, 1946, to do nothing more than continue the authority of Government agencies to settle contracts under the First War Powers Act. In support of this contention, Government counsel refers to several statements made by members of Congress. Such statements, however, cannot overcome the unambiguous provision of the statute. It is important to note in this connection that when the legislation was originally introduced in the Congress, it was much narrower in its scope than the form in which it finally was passed. It may well be that some of the statements to which counsel refers had reference to the legislation in its original form. The bill as originally introduced contained a proviso that it should not be applicable to claims submitted under the First War Powers Act, which had been finally disposed of prior to August 14, 1945. It is significant that this proviso was stricken from the measure in the course of its passage and the last clause of Section 3 was inserted, affirmatively providing that a previous settlement under the earlier statute should not operate to preclude further relief otherwise allowable under the Act.

 With the policy or expediency of this legislation, the Court has no concern. It is the duty of the Court to apply the statute as it is written, in view of the fact that it is unambiguous.

 Insofar as Sections 204 or 307 of the rules and regulations promulgated under the statute may be inconsistent with Section 3 of the Act, these regulations must be deemed invalid. It is elementary law that executive regulations promulgated for the purpose of carrying a statute into effect must be within the framework of the Act and may not be inconsistent with the statute.

 On the basis of these considerations, the motion of the defendants for summary judgment will be denied.

 The United States also moves to dismiss the complaint on the ground that the United States may ...


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