South Louisiana Grain Services, Inc. v. United States

30 Cont. Cas. Fed. 70,493, 1 Cl. Ct. 281, 1982 U.S. Claims LEXIS 2310
CourtUnited States Court of Claims
DecidedNovember 2, 1982
DocketNo. 31-81C
StatusPublished
Cited by60 cases

This text of 30 Cont. Cas. Fed. 70,493 (South Louisiana Grain Services, Inc. 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
South Louisiana Grain Services, Inc. v. United States, 30 Cont. Cas. Fed. 70,493, 1 Cl. Ct. 281, 1982 U.S. Claims LEXIS 2310 (cc 1982).

Opinion

OPINION

LYDON, Judge:

This case comes before the court on defendant’s motion for summary judgment and plaintiff’s opposition thereto. Plaintiff seeks to recover damages which it alleges it incurred when defendant, acting through the Federal Grain Inspection Service (FGIS), Department of Agriculture, breached a contract which plaintiff alleges came into being as a result of an oral agreement between FGIS and plaintiff. In its motion, defendant claims that plaintiff did not have a contract with FGIS, and further challenges the jurisdiction of the court to grant any relief because, first, assuming a contract, no appropriated funds were involved, and second, plaintiff’s claim sounds in tort. Further, defendant suggests that the sovereign act doctrine precludes recovery in any event. Plaintiff maintains, in opposition to defendant’s motion, that the contract on which it relies, although not embodied in a written agreement, can be inferred from the conduct of personnel of FGIS and plaintiff and that “plaintiff may, upon trial, be able to prove facts in addition to the alleged expressed oral contract, from which a contract [implied in fact] may be inferred by a ‘meeting of the minds’.”

I.

A. Background Statement

In order to place the issues raised by the parties in proper perspective, it is deemed helpful initially to set forth some background information gleaned from the legislative history of the United States Grain Standards Act of 1976, P.L. 94-582, 90 Stat. 2867, 7 U.S.C. §§ 71-87h (1976) which became effective October 21, 1976 (hereinafter the 1976 Act). See H.R.Rep. No. 966, 94th Cong. 2d Sess.; S.Rep. No. 747, 94th Cong.2d Sess. (1976); reprinted [1976] U.S. Code Cong. & Admin.News, pp. 6522-6603.

Initially, there were no federal or state standards for inspection and grading of grain. In time, some states began grain inspection and grading systems. On August 11, 1916, recognizing the need for uniform grain inspection and grading standards, Congress passed the United States Grain Standards Act, 39 Stat. 482.

The 1916 Act provided mandatory national standards and a “two-level” national inspection and grading system for all American grain shipped in interstate or foreign commerce. The first level of this system was operated by state, trade and privately-owned inspection agency employees licensed by the United States Department of Agriculture (USDA). This level was the so-called “official inspection agencies.” The second level involved supervisory and appeal inspectors employed by USDA. The Secretary of USDA was permitted to license competent individuals to perform inspection and grading services and to revoke such licenses for cause. The grain industry operated under the 1916 Act until 1968 when the Act was revised. P.L. 90-487, 82 Stat. 761. However, the two-level national inspection and grading system mentioned above remained essentially as it was under the 1916 Act. In substance, this system regulated the performance of what was essentially a government function by state, trade and privately-owned inspection agencies. As of 1976, inspection activities were conducted by individuals who were licensed by the Secretary of Agriculture and who [283]*283worked for the various official inspection agencies designated by the Secretary. The role of USDA under the 1916 Act, as amended, was limited to supervision or grading when one party to a sale of grain appealed the decision of a licensed operator. There was no provision in the 1916 Act for the USDA to perform original grain inspections and gradings.

As of 1976, there were about 110 inspection agencies performing grain inspections and gradings in the United States under the 1916 Act, as amended, pursuant to designations by the Secretary of USDA. Of these, 23 were agencies operated by a state, 41 were trade agencies, and 46 were privately-owned agencies. Plaintiff was one of the privately-owned agencies designated by the Department of Agriculture to perform grain inspection and grading services. Plaintiff received its compensation for such services from the sellers of grain.

During 1973 and 1974, reports of irregular practices in the grain inspection system surfaced. Committees of both Houses of Congress undertook their own investigations of this system. These investigations and hearings resulted in the passage of the 1976 Act, supra. See South Louisiana Grain Services, Inc. v. Bergland, 463 F.Supp. 783 (D.D.C.1978), aff’d. 590 F.2d 1204 (D.C.Cir.1978). The 1976 Act federalized the entire grain inspection and weighing system throughout the country. It provided that at export locations, all inspections and weighing work would be performed by federal employees except in those states declared eligible by the Secretary of Agriculture to be delegated authority to undertake these activities. As to inspection and weighing services at inland ports, the 1976 Act required a further study of the system so as to inform Congress of the need to federalize the system at those points. See 7 U.S.C. § 79, note.

The 1976 Act authorized and directed the Administrator of the FGIS to cause federalization of grain inspection and weighing “to begin at any time immediately after October 21, 1976, at those export port locations * * * at which the Administrator determines that such performance by such authorized [federal] employees is necessary to effectuate the provisions of [the 1976 Act].” The 1976 Act further provided that any agency, such as plaintiff, who was providing inspection and weighing services on the effective day of the Act may continue to operate without a delegation or designation until “the expiration of a period determined by the Administrator of not more than eighteen months following the effective date hereof.” The parties herein agree that this limited period provided by the 1976 Act would run out on April 23, 1978. On this date, or sooner if so determined by the Administrator, all inspection and weighing services at export locations would be performed by federal employees, and not by privately-owned companies such as plaintiff. The sellers of grain would, after federalization, compensate the federal government for performing such services.

B. The Dispute Between The Parties

Plaintiff, formerly known as South Louisiana Port Inspection & Weighing Board, Inc., was incorporated in 1963, and was engaged in grain inspection services since that time. Its president and sole director in 1976, John A. Williamson, Jr. (Williamson) was associated with the corporation since its inception. Prior thereto, he had been employed by the Department of Agriculture as a Grain Inspection Supervisor for the period 1949 to 1963. As of 1976, the ownership interests of the corporation were in the hands of five shareholders, which included Williamson.

Plaintiff had been designated, as indicated previously, as an official grain and weighing inspection agency in certain areas in Louisiana. Its central office was in Destrehan, Louisiana. On September 9, 1975, and on numerous occasions prior thereto, plaintiff had written the Department of Agriculture and expressed interest in expanding its grain inspection and weight services to other locations which might become available.

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Bluebook (online)
30 Cont. Cas. Fed. 70,493, 1 Cl. Ct. 281, 1982 U.S. Claims LEXIS 2310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-louisiana-grain-services-inc-v-united-states-cc-1982.