Larson v. Domestic & Foreign Commerce Corp.
337 U.S. 682 (1949)
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Rule of Law:
A suit for specific relief against a government officer is barred by sovereign immunity if the officer's actions are within their valid statutory authority, even if those actions are allegedly tortious or constitute a breach of contract. Such a suit is only permissible if the officer's action is beyond their statutory powers (ultra vires) or if the statute conferring power is unconstitutional.
Facts:
- The War Assets Administration (WAA), a U.S. government agency, entered into a contract to sell surplus coal to the Domestic & Foreign Commerce Corporation.
- A dispute arose over the contract's payment terms.
- The WAA, led by Administrator Littlejohn, interpreted the contract as requiring the corporation to deposit funds in advance of shipment.
- The corporation believed payment was only required upon delivery of shipping documents and offered a letter of credit instead of a cash deposit.
- The WAA deemed the letter of credit unsatisfactory and considered the corporation to be in breach of the contract.
- Consequently, the Administrator refused to deliver the coal to the corporation and canceled the sale.
- The Administrator then entered into a new contract to sell the same coal to a third party.
Procedural Posture:
- Domestic & Foreign Commerce Corporation sued the Administrator of the War Assets Administration in the U.S. District Court for the District of Columbia.
- The plaintiff sought an injunction to prevent the sale of surplus coal to another party and a declaration that its own contract was valid.
- The defendant moved to dismiss the complaint on the grounds that the suit was, in effect, a suit against the United States and was therefore barred by sovereign immunity.
- The District Court (trial court) granted the motion and dismissed the suit for lack of jurisdiction.
- The plaintiff (appellant) appealed to the U.S. Court of Appeals for the D.C. Circuit.
- The Court of Appeals reversed the dismissal, holding that jurisdiction depended on whether title to the coal had passed to the plaintiff, and remanded the case to the trial court to decide that issue on the merits.
- The Administrator (petitioner) sought and was granted a writ of certiorari from the U.S. Supreme Court.
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Issue:
Does sovereign immunity bar a suit for specific relief against a government officer who, while acting within the scope of their statutory authority, allegedly commits a tort or breach of contract by wrongfully withholding property claimed by the plaintiff?
Opinions:
Majority - Chief Justice Vinson
Yes, sovereign immunity bars such a suit. A lawsuit seeking specific relief against a government officer, such as an injunction, is in substance a suit against the sovereign itself if the relief would restrain the Government from acting or compel it to act. The Court recognizes only two exceptions to this rule: (1) when the officer acts beyond their statutory authority, or (2) when the authority itself or the manner of its exercise is unconstitutional. Here, the plaintiff did not allege that the Administrator lacked the statutory power to administer a sales program or to interpret contracts. The claim is merely that the Administrator's interpretation was erroneous and tortious. An error in the exercise of delegated power is not the same as a lack of that power. Allowing such suits based on claims of tort or breach of contract would permit courts to stop the government in its tracks, interfering with public administration over any disputed property or contract right. The proper remedy for the plaintiff is a suit for damages in the Court of Claims, not an injunction against the officer.
Dissenting - Justice Frankfurter
No, sovereign immunity does not bar such a suit. The majority's decision wrongly departs from a long line of precedent, beginning with United States v. Lee, which establishes that an officer who commits a common-law tort, such as wrongfully withholding property, is not shielded by sovereign immunity. When a plaintiff makes a substantial claim that they own property an officer is holding, the suit is against the officer as an individual tortfeasor. The court has jurisdiction to determine the preliminary question of ownership. Only if the property is found to belong to the government does the issue of sovereign immunity become relevant. The availability of a damages remedy in the Court of Claims does not eliminate the plaintiff's right to sue the individual officer for the specific recovery of their property. This ruling allows an officer to immunize a tortious act simply by asserting it was done on behalf of the government.
Analysis:
This decision significantly narrowed the exceptions to sovereign immunity by clarifying the distinction between an officer's lack of power and the erroneous exercise of that power. It effectively eliminated a third potential exception based on an officer's commission of a common-law tort. By establishing a strict two-part test (ultra vires action or unconstitutionality), the Court prioritized the uninterrupted functioning of government administration over a private party's ability to obtain specific relief. This precedent forces plaintiffs in contract and property disputes with the government to seek monetary damages in the Court of Claims rather than using injunctions to interfere with executive branch actions.
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