AIRPORT & DIESEL EQPT. CORP. V. HIRSCH, 331 U. S. 752 (1947)

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U.S. Supreme Court

Airport & Diesel Eqpt. Corp. v. Hirsch, 331 U.S. 752 (1947)

Airport & Diesel Equipment Corp. v. Hirsch

No. 95

Argued January 15, 1947

Decided June 16, 1947

331 U.S. 752


1. Pursuant to the First and Second Renegotiation Acts, the Secretary of War and the War Contracts Adjustment Board, respectively, determined that appellant had realized excessive profits during two years on subcontracts under which it had supplied parts to contractors manufacturing war equipment for the Army, and the Under Secretary of War directed certain of appellant's customers to withhold and pay into the Treasury sums due appellant equal to such excessive profits (less tax credits) for the second of the years in question. After petitioning the Tax Court for redetermination and while such proceedings were pending, appellant sued in a federal district court for a declaratory judgment that the Renegotiation Acts are unconstitutional and for an injunction against further proceedings thereunder.


(a) The suit is premature, since appellant had not exhausted its administrative remedy before the Tax Court. Pp. 331 U. S. 764-774.

(b) The district court had no jurisdiction in equity, since appellant had a complete remedy at law by actions against the contractors to which it had supplied the parts. Pp. 331 U. S. 774-781.

2. Mere suggestions of claim for relief raising serious constitutional questions are not to be entertained upon dubious presentations or, most certainly, when the presentation reasonably may be taken as not intended to put them forward squarely and inescapably. P. 331 U. S. 763.

3. The doctrine of exhaustion of administrative remedies requires not merely the initiation of prescribed administrative procedures; it requires pursuing them to their appropriate conclusion and awaiting their final outcome before seeking judicial intervention. P. 331 U. S. 767.

4. Where Congress has clearly commanded that administrative judgment be taken initially or exclusively, the courts have no lawful function to anticipate the administrative decision with their own, whether or not, when it has been rendered, they may intervene either in presumed accordance with Congress' will or because, for constitutional reasons, its will to exclude them has been exerted in an invalid manner. P. 331 U. S. 767.

Page 331 U. S. 753

5. By providing in the Renegotiation Acts for administrative determinations of excessive profits by the War Contracts Price Adjustment Board and for redeterminations de novo by the Tax Court, Congress intended to secure uniformity of administrative policy and disposition, expertness of judgment, and finality of determination at least of those things which Congress intended to and could commit to such agencies for final decision. Pp. 331 U. S. 767-768.

6. Congress intended the Tax Court's functions with respect to redetermination of excessive profits under war contracts not only to be put in motion, but to be fully performed, before judicial intervention at the instance of one in appellant's position, even though constitutional questions are raised. P. 331 U. S. 771.

7. Where Congress clearly intended to require administrative determination, either to the exclusion of judicial action or in advance of it, a strong showing is required, both of inadequacy of the prescribed procedure and of impending harm, to permit short-circuiting the administrative process -- especially in the case of wartime legislation resting, at least in part, on war powers. Pp. 331 U. S. 773-774.

8. Appellant subcontractor has an adequate remedy at law by suits upon its contracts against its customers; since such suits are not forbidden expressly or impliedly by the Renegotiation Acts, they are not made dependent upon completion of the Tax Court proceedings, and there appears to be no reason why every question of constitutionality raised in this suit could not be presented and determined in such a suit. Pp. 331 U. S. 775-777.

9. Appellant's allegations that it would suffer irreparable injury as a result of the withholding of the funds due from its customers are insufficient to sustain the intervention of a court of equity, particularly to avoid or anticipate the congressionally authorized proceeding. Pp. 331 U. S. 777-778.

10. Nor, on the facts of this case, is the showing made concerning multiplicity of suits sufficient to justify intervention of a court of equity or the substitution of its extraordinary relief for what appears to be a dull, adequate, and completely available remedy at law. Pp. 331 U. S. 778-781.

62 F. Supp. 520 affirmed.

While proceedings were pending in the Tax Court for redetermination of excessive profits determined by the Secretary of War and the War Contracts Price Adjustment Board to have been realized by a subcontractor on production of war equipment, the subcontractor sued in

Page 331 U. S. 754

a Federal District Court for a declaratory judgment that the Renegotiation Acts are unconstitutional and for an injunction against further proceedings thereunder. The District Court dismissed the suit. 62 F.Supp. 520. On appeal to this Court, affirmed, p. 331 U. S. 781.

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