Porter v. United States

496 F.2d 583, 20 Cont. Cas. Fed. 83,041, 204 Ct. Cl. 355, 1974 U.S. Ct. Cl. LEXIS 128
CourtUnited States Court of Claims
DecidedMay 15, 1974
DocketNo. 111-73
StatusPublished
Cited by108 cases

This text of 496 F.2d 583 (Porter v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Porter v. United States, 496 F.2d 583, 20 Cont. Cas. Fed. 83,041, 204 Ct. Cl. 355, 1974 U.S. Ct. Cl. LEXIS 128 (cc 1974).

Opinions

Kunzig. Judge,

delivered the opinion of the court:

The court is confronted in this case with a jurisdictional question of first impression: is the United States subject to suit (1) f or alleged breach of a contract negotiated by officials serving in the capacity of administrators for the United States Pacific Islands Trust Territory, or (2) for an alleged talking of property arising from actions by such officials pursuant to that contract? We conclude that the court lacks jurisdiction over either of these claims. Accordingly, we dismiss the petition.

Plaintiffs are sixteen named shareholders in Transpacific Lines, Inc. (Transpacific), a corporation chartered by the Government of the Trust Territory of the Pacific Islands (Trust Territory).1 Their suit for recovery of financial losses incurred by their enterprise derives from the following factual background.

On March 18,1968, the Office of the Trust Territory High Commissioner issued a press release headlined “Trust Territory Invites Shipping Proposals.” The release stated in part:

The Government of the Trust Territory of the Pacific Islands is seeking proposals for a 10-year sea transportation contract. In addition to providing direct service from the U.S. west coast the contractor would be called upon to service the Trust Territory’s six scattered districts * * *. The Territory is administered by the [358]*358United States under a United Nations trusteeship agreement.

Subsequently, a “Solicitation for Proposals for Trust Territory of tlie Pacific Islands Sea Transportation Services” was issued. This directed interested parties to submit proposals to the Pligh Commissioner of the Territory, together with a copy to the Director of the Office of Territories, United States Department of the Interior (Interior), by May 15, 1968. Timely proposals were received at these offices from Marine Chartering Company (Marine), a California corporation, and several other enterprises. In July 1968, Robert E. Vaughn, Deputy Assistant Secretary of the Interior, invited representatives of bidding parties to meet with a review panel at Interior to discuss the proposals. Following this meeting, attended by Marine’s president, the panel concluded Marine had presented the best proposal.

Negotiations resulted in an agreement entered into on August 1,1968. The agreement’s preamble recited that it was “by and between the Government of the Trust Territory * * * and Marine Chartering Company, Inc.” The signature block again identified the contracting parties as the Trust Territory government and Marine.

By article XVIII of the agreement, Marine was required to transfer and assign the agreement within six months to Micronesia Interoceans Line, Inc. (MILI), which was to be organized and capitalized by Marine with substantial participation by citizens of the Trust Territory. The article also provided that, during the contract’s tenure, “the Carrier shall operate the Vessels under the flag of the Trust Territory * * On August 8,1968, articles of incorporation were filed for MILI with the Registrar of Corporations in Saipan. MILI’s principal office and place of business were listed as Saipan. The agreement was thereupon transferred and assigned to MILI.

On September 22, 1911, Barclays Bank of San Francisco informed the Trust Territory government that MILI would not be extending a $500,000 letter of credit which it had opened in the Trust Territory government’s favor, and that the letter would expire in two days. The Trust Territory was already concerned with numerous other alleged performance [359]*359deficiencies on MILI’s part, and on September 29,1971 notified the corporation of its intention to terminate for default as authorized by article XX of the agreement.

After meetings between the president of Marine, which still owned substantial shares of MILI, and the Trust Territory attorney general, an agreement was signed by the Territory’s High Commissioner and by representatives of MILI. The agreement inter alia withdrew notice of default, suspended article XXVI (which required Marine to furnish a $500,000 performance bond), and set up a trust for certain MILI shares held by Marine.

On October 20, 1971, Marine, MILI and the Trust Territory attorney general became parties to a “Trust Agreement” by which the attorney general was designated trustee of the 210,000 class B shares in MILI owned by Marine. A complete divestment of Marine’s stock in MILI, in consideration of the Trust Territory government withdrawing its notice of cancellation of the 1968 contract, was then accomplished. Subsequent to plaintiffs’ filing of petition on March 30,1973, on the breach and unconstitutional taking issues raised above, the corporate name of MILI was changed to Transpacific.2

Defendant has moved for summary judgment on both issues. For the reasons which follow, we grant the motion on both issues.

The Breach Claim

As a forum for claims against the Federal Government, a necessary antecedent to our jurisdiction is a waiver by the Government of its sovereign immunity from suit. National State Bank of Newark v. United States, 174 Ct. Cl. 872, 876, 357 F. 2d 704, 706 (1966). In our general jurisdictional statute, 28 U.S.C. § 1491 (Supp. II, 1972), Congress has waived the immunity of the United States in a host of actions, including those based upon express or implied contracts.

Plaintiffs invoke this jurisdictional statute by asserting their claim arises from a contract, either express or implied, with the United States. Defendant counters that plaintiffs fail to state a claim within the court’s jurisdiction since no [360]*360privity of contract exists between Transpacific and tlie United States. We agree with, defendant.3

The analysis which follows deals with the relevant questions of (1) whether defendant is an express party to the subject, written contract; (2) whether defendant is a principal to the subject, written contract; (3) whether an implied contract exists between the parties.

Plaintiffs’ claim is purportedly based upon the contract for sea transportation services of August 1,1968. The United States, however, was not a party to that agreement. As recited in the preamble to the contract and again in the signature block, the parties to the agreement were the Trust Territory government and Transpacific (as successor to Marine).

Since defendant was not a named party contracting with Transpacific, the court can have jurisdiction over this claim only if, as a matter of law, the Trust Territory government was an agency or instrumentality of the United States acting within the scope of its authority in entering into the disputed agreement and thereby binding defendant as a principal to it. D. R. Smalley & Sons, Inc. v. United States, 178 Ct. Cl. 593, 372 F. 2d 505, cert. denied, 389 U.S. 835 (1967); Housing Corp. of America v. United States, 199 Ct. Cl. 705, 468 F. 2d 922 (1972); Raymond Constructors of Africa, Ltd. v. United States, 188 Ct. Cl. 147, 411 F. 2d 1227 (1969). Under such circumstances, the Federal Government would be considered to have waived its sovereign immunity from suit on this contract. National State Bank of Newark v.

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Bluebook (online)
496 F.2d 583, 20 Cont. Cas. Fed. 83,041, 204 Ct. Cl. 355, 1974 U.S. Ct. Cl. LEXIS 128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/porter-v-united-states-cc-1974.