of cases would it be safe for a contractor's attorney to advise the filing of a suit without first presenting the dispute to the contracting officer and then, if dissatisfied, appealing to the head of the Department or the appropriate board acting for him. On occasion, the contractor might fear that if the question is ultimately determined to be one involving a question of law which is not covered by the Disputes article, then the time taken to obtain determinations from the contracting officer and the head of the Department may be such as to permit the applicable six year statute of limitations to pass. However, one solution would be to toll the statute by filing a petition and then promptly move for a suspension of the proceedings in order to enable the completion of the administrative process. Normally, there will be no objection to this procedure either from the Department of Justice or the Court. Thus, the contractor simultaneously solves both his exhaustion and statute of limitations problems. In this way, the sometimes unhappy spectacle of the contractor's failure to take the necessary administrative steps, waiting until the statute of limitations is almost up, and then rushing into Court at the last moment to save his cause of action, only to be met with the inevitable Government motion to dismiss for failure to exhaust his administrative remedies, is avoided, True, the Court is understandably loathe to dismiss such a case where the contractor, though belatedly, expresses a desire to return to the agency to complete the administrative process, and may, upon the contractor's request, even at this late stage of facing a Government motion to dismiss, order a suspension of the Court proceedings to permit the contractor to do so. But by then the contractor may be met in the agency with the defense that he has slept on his contract rights, including the 30 day time limitation in the Disputes clause." Then, upon returning to Court, the contractor may be faced with the necessity of convincing the Court that his dispute really involves only a question of law that does not fall within the coverage of the Disputes article and that he is, therefore, entitled to have his case determined on the merits by the Court. This is, indeed, a treacherous course to follow. Obviously, it is the safer and more expeditious practice to complete the administrative process before being compelled to do so by a Government motion to dismiss. COUNTERCLAIMS 38 Practitioners are often dismayed to learn, when the answer is filed, that their clients are indebted to the Government on other transactions, or for various kinds of taxes, and that even if they are successful on their affirmative contract claims, the victory is a Pyrrhic one, for the recovery will simply be set-off or credited against the larger Government indebtedness. It is disheartening to emerge from a long legal battle with the only tangible evidence being a reduction in the contractor's overall indebtedness to the Government. From a fee point of view, the problem may have further practical aspects, for there is no attorney's lien on the contractor's recovery which takes precedence over the Government's counterclaim. Furthermore, interest accrues on the contractor's indebtedness to the Government," although the contractor's claim against the Government ordinarily does not bear interest." Contractors' counsel often express surprise that the Government is even permitted to counterclaim for unrelated indebtedness. However, 28 U.S.C. § 2508 not only expressly permits it, but has even been so broadly construed as to permit counterclaims for a type of indebetedness the enforcement of which the statutes provide shall be by affirmative suit instituted by the United States only in the District Courts." Indeed, counsel should feel grateful for being informed by the Government's answer of the indebtedness concerning which his own client probably failed to advise him. At least he knows before he embarks The Armed Services Board of Contract Appeals has held that it cannot waive the failure of the contractor to appeal within the required period. Schroeder Tool & Engineering, Inc., ASBCA No. 851 (1952). See Cuneo, Development of the Administrative Record, 1 Government Contracts Review, No. 11 (1957), p. 8. Cherry Cotton Mills, Inc. v. United States, 327 U.S. 536 (1946). Empire Ordnance Corporation and Intervenors, McHale and Gutt v. United States, 130 C. Cls. 719, 128 F. Supp. 744 (1955); Pittman v. United States, 127 C. Cls. 173, 116 F. Supp. 576 (1954), cert. den. 348 U.S. 815. Billings v. United States, 232 U.S. 261 (1914); Ship Const. Co., Inc. v. United States, 91 C. Cls. 419, 465 (1940); Zink v. United States, 123 C. Cls. 85 (1952); Standard Shipbuilding Corp. v. United States, 133 C. Cls. 402, 135 F. Supp. 892 (1956). 41 U.S.C. 2516(a); United States v. N. Y. Rayon Importing Co., 329 U.S. 654 (1947); United State v. Thayer-West Point Hotel Co., 329 U.S. 585 (1947). Erie Basin Metal Products, Inc. v. United States, 123 C. Cls. 433 (1952). upon the trial what the actual situation is concerning his client's financial plight. For, insofar as unrelated transactions are concerned and therefore, absent compulsory counterclaim considerations, the Government is not obliged to file its claims in the Court of Claims proceeding. An alternative procedure is simply to wait and see if the contractor recovers on his claim. Should he obtain a judgment, the Comptroller General then can, under 31 U.S.C. 227, set the judgment off against the Government's claim. In such event, the first the attorney will have learned of the contractor's indebtedness to the Government will be after trial and judgment. The moral is that counsel should, insofar as it is possible to do so, ascertain in advance of bringing suit the full story of the contractor's financial status resulting from all of his dealings with the Government over the years, for ordinarily no statute of limitations runs against the Government's claim.** PRETRIAL When the pleadings are closed, and the case has not been disposed of by motion, trial preparation must, of course, begin. Every Court of Claims case is assigned to one of the Court's trial Commissioners for trial of the facts. In line with modern trial practice, the Commissioners make extensive use of pretrial proceedings, especially when claimant's counsel practices in Washington and is available for conferences in the Commissioner's office at the Court. More than one pre-trial session may be had. Documents may be offered in evidence, and appropriate objections made and ruled upon. Stipulations of fact may be entered into. Necessary amendments to the pleadings may be made. Experience has indicated that days, and in some cases even weeks, of trial time may be saved by intelligent use of pre-trial insofar as the introduction of documents alone is concerned. Discovery procedures should, of course, be undertaken and completed well before the trial commences. Attention is again directed to the two most common methods available to the parties of obtaining and inspecting the adversary's documents relating to the dispute. One is through the "motion for call" device, previously referred to. This is a specific Court of Claims procedure. It is authorized by the statutes, and the detailed requirements are set forth in the Rules." Among other things, the documents desired must be described with reasonable particularity and must be shown to be relevant to the issues in the case. When Government documents are so sought by the contractor, and the motion is allowed by the Court, the "call" is issued directly to the Government agency in possession of the documents which are then filed by the agency with the Clerk of the Court. Such mere filing, however, does not result in the document's being automatically admitted into evidence. They must be separately offered and ruled upon, either at pre-trial or at the actual trial. The second method is through the discovery process, also as stated, now specifically authorized by statute" and the procedure with respect thereto being similarly delineated by the Rules." The general rules applicable to discovery procedures under the Federal Rules are for the most part applicable in the Court of Claims. One important aspect of the "call" and "discovery" procedures that must be considered, merely by reason of the fact that the action is against the Government, is that of Government privilege. The production of documents pursuant to the "call" procedure is seemingly, in accordance with the specific statutory language, subject to an absolute determination by the particular agency head to whom the call is issued that it would not be in the public interest to disclose the document sought. On discovery procedures, however, the interplay between agency head and the Court, insofar as the ultimate determination of the propriety 43 "When any final judgment recovered against the United States duly allowed by legal authority shall be presented to the Comptroller General of the United States for payment, and the plaintiff therein shall be indebted to the United States in any manner, * it shall be the duty of the Comptroller General of the United States to withhold payment of an amount of such judgment equal to the debt thus due to the United States: ***” 44 N. Dakota-Montana Wheat Growers Assn. v. United States, 94 C. Cls, 665, 699 (1941); See Note. Immunity From Statutes of Limitation and Other Doctrines Favoring the United States as Plaintiff. 55 Col. L. Rev. 1177 (1955); Remedies Against the United States and Its Officials, 70 Harv. L. Rev. 827 (1957). 45 28 U.S.C. 2507(a). 46 Rule 27, "Calls." 47 See footnote 6. 48 Rule 26. 50 of claiming the privilege is concerned, is not so clear." In any event, it seems plain that it would take an extraordinary showing of need for the document to cause the Court to overrule an agency head's good faith determination that it would not be in the public interest to disclose a document. The military and “state secret” aspects of Governmental privilege are now well recognized. The recent important decision of the Court of Claims in Kaiser Aluminum & Chemical Corp. v. United States, decided January 15, 1958, written by retired Supreme Court Justice Reed, sitting by designation, made plain that another category of document was entitled to the privilege, i.e., intraoffice advisory opinion memoranda of a policy nature written by subordinates to their superiors. Thus, although the Court is, in line with modern practice, generally hospitably inclined toward discovery procedures insofar as they serve to eliminate surprise and expedite the proceedings, contractors must nevertheless realize that, even in ordinary contract litigation against the Government, the problem of sovereignty still exists and that there are privileged areas which, in the interests of proper governmental management and, therefore, the general public welfare cannot be invaded. One of the most important uses of pretrial in contract actions pertains to audit procedures. In complicated damage suits, proof from the contractor's books and records of expenditures, extra costs, and other damage items, together with the testimony of bookkeepers, accountants, and experts, can consume many days or even weeks of trial time, as every experienced trial lawyer knows. However, there is no reason why audits cannot be made prior to the trial and agreements on figures reached or areas of disagreement determined, leaving a minimum of such testimony for the trial. Schedules prepared by accountants from the books and records can substitute for the records themselves. Pretrial audits have proved so successful in contract actions that the Rules now provide that the contractor may be required "to furnish in advance of trial a statement showing the items and figures intended to be proved, with adequate reference to the books or records from which such figures were taken, and to make all such books and records or any part thereof available for examination After an examination by the Government's accountants, the Government will then submit to the contractor, if it disagrees with the contractor's statements, a set of schedules showing the details and results of its examination and wherein the difference lies. 51 99 52 ** However, contractors interested in expediting their cases need not wait for this procedure to be ordered by the Commissioner. There is frequently no reason why they should not voluntarily present their audits to the Government attorney as soon as practicable, and offer to make their books and records available so that their accounting statements can be checked. Often counsel will find that the task is one that can be taken over almost completely by the accountants, with the need to refer to counsel only when basic theoretical accounting or legal principles and differences are involved. Practitioners familiar with the practice under the Federal Rules frequently assume that the pretrial deposition procedure for discovery purposes so widely employed thereunder can similarly be used in a Court of Claims proceeding. However, this is not the case. Depositions are used in Court of Claims proceedings only in connection with the conduct of the actual trial and then only in exceptional circumstances, such as where it is not practical for the testimony to be taken in the normal manner before the Commissioner." They are not used for discovery purposes. The taking of testimony out of order at a distant place at a time before the regularly scheduled trial and for the purpose of preserving the testimony, or the obtaining of testimony in foreign countries, are examples of situations where they are sometimes permitted. Special leave to so proceed must be obtained from the Commissioner or the Court. One final word as to pretrial. While the Rules of the Court provide for all aspects of it-conferences at the Court, discovery, calls, admissions, stipulations, and audits-it should be realized that it is not necessary for counsel to sit back and wait until the Commissioner initiates and orders the procedure. Almost every phase of pretrial procedure covered by the Rules can be undertaken voluntarily and informally by counsel meeting directly with each other and without the intervention of the Commissioner. Frequently counsel make unnecessary "See The Executive's Right of Privacy, 66 Yale L. J. 477 (1957); Extent of Governmental Immunity From Rule 34, 41 Va. L. Rev. 507 (1955). 50 United States v. Reynolds, 345 U.S. 1 (1952). 1 See Evans, The United States Court of Claims, 17 Fed. B. J. 85, 97–99 (1957). Rule 28(b) (2). Rule 29. upon the trial what the actual situation is concerning his client's financial plight. For, insofar as unrelated transactions are concerned and therefore, absent compulsory counterclaim considerations, the Government is not obliged to file its claims in the Court of Claims proceeding. An alternative procedure is simply to wait and see if the contractor recovers on his claim. Should he obtain a judgment, the Comptroller General then can, under 31 U.S.C. 227, set the judgment off against the Government's claim. In such event, the first the attorney will have learned of the contractor's indebtedness to the Government will be after trial and judgment. The moral is that counsel should, insofar as it is possible to do so, ascertain in advance of bringing suit the full story of the contractor's financial status resulting from all of his dealings with the Government over the years, for ordinarily no statute of limitations runs against the Government's claim." PRETRIAL When the pleadings are closed, and the case has not been disposed of by motion, trial preparation must, of course, begin. Every Court of Claims case is assigned to one of the Court's trial Commissioners for trial of the facts. In line with modern trial practice, the Commissioners make extensive use of pretrial proceedings, especially when claimant's counsel practices in Washington and is available for conferences in the Commissioner's office at the Court. More than one pre-trial session may be had. Documents may be offered in evidence, and appropriate objections made and ruled upon. Stipulations of fact may be entered into. Necessary amendments to the pleadings may be made. Experience has indicated that days, and in some cases even weeks, of trial time may be saved by intelligent use of pre-trial insofar as the introduction of documents alone is concerned. Discovery procedures should, of course, be undertaken and completed well before the trial commences. 46 45 Attention is again directed to the two most common methods available to the parties of obtaining and inspecting the adversary's documents relating to the dispute. One is through the "motion for call" device, previously referred to. This is a specific Court of Claims procedure. It is authorized by the statutes, and the detailed requirements are set forth in the Rules. Among other things, the documents desired must be described with reasonable particularity and must be shown to be relevant to the issues in the case. When Government documents are so sought by the contractor, and the motion is allowed by the Court, the "call" is issued directly to the Government agency in possession of the documents which are then filed by the agency with the Clerk of the Court. Such mere filing, however, does not result in the document's being automatically admitted into evidence. They must be separately offered and ruled upon, either at pre-trial or at the actual trial. 48 The second method is through the discovery process, also as stated, now specifically authorized by statute" and the procedure with respect thereto being similarly delineated by the Rules. The general rules applicable to discovery procedures under the Federal Rules are for the most part applicable in the Court of Claims. One important aspect of the "call" and "discovery" procedures that must be considered, merely by reason of the fact that the action is against the Government, is that of Government privilege. The production of documents pursuant to the "call" procedure is seemingly, in accordance with the specific statutory language, subject to an absolute determination by the particular agency head to whom the call is issued that it would not be in the public interest to disclose the document sought. On discovery procedures, however, the interplay between agency head and the Court, insofar as the ultimate determination of the propriety 43 "When any final judgment recovered against the United States duly allowed by legal authority shall be presented to the Comptroller General of the United States for payment, and the plaintiff therein shall be indebted to the United States in any manner, *** it shall be the duty of the Comptroller General of the United States to withhold payment of an amount of such judgment equal to the debt thus due to the United States: 44 N. Dakota-Montana Wheat Growers Assn. v. United States, 94 C. Cls. 665, 699 (1941); See Note. Immunity From Statutes of Limitation and Other Doctrines Favoring the United States as Plaintiff. 55 Col. L. Rev. 1177 (1955); Remedies Against the United States and Its Officials, 70 Harv. L. Rev. 827 (1957). 45 28 U.S.C. 2507 (a). 46 Rule 27, "Calls." 47 See footnote 6. 48 Rule 26. 50 of claiming the privilege is concerned, is not so clear." In any event, it seems plain that it would take an extraordinary showing of need for the document to cause the Court to overrule an agency head's good faith determination that it would not be in the public interest to disclose a document. The military and "state secret" aspects of Governmental privilege are now well recognized. The recent important decision of the Court of Claims in Kaiser Aluminum & Chemical Corp. v. United States, decided January 15, 1958, written by retired Supreme Court Justice Reed, sitting by designation, made plain that another category of document was entitled to the privilege, i.e., intraoffice advisory opinion memoranda of a policy nature written by subordinates to their superiors. Thus, although the Court is, in line with modern practice, generally hospitably inclined toward discovery procedures insofar as they serve to eliminate surprise and expedite the proceedings, contractors must nevertheless realize that, even in ordinary contract litigation against the Government, the problem of sovereignty still exists and that there are privileged areas which, in the interests of proper governmental management and, therefore, the general public welfare cannot be invaded. One of the most important uses of pretrial in contract actions pertains to audit procedures. In complicated damage suits, proof from the contractor's books and records of expenditures, extra costs, and other damage items, together with the testimony of bookkeepers, accountants, and experts, can consume many days or even weeks of trial time, as every experienced trial lawyer knows. However, there is no reason why audits cannot be made prior to the trial and agreements on figures reached or areas of disagreement determined, leaving a minimum of such testimony for the trial." Schedules prepared by accountants from the books and records can substitute for the records themselves. Pretrial audits have proved so successful in contract actions that the Rules now provide that the contractor may be required "to furnish in advance of trial a statement showing the items and figures intended to be proved, with adequate reference to the books or records from which such figures were taken, and to make all such books and records or any part thereof available for examination *** 99 52 After an examination by the Government's accountants, the Government will then submit to the contractor, if it disagrees with the contractor's statements, a set of schedules showing the details and results of its examination and wherein the difference lies. However, contractors interested in expediting their cases need not wait for this procedure to be ordered by the Commissioner. There is frequently no reason why they should not voluntarily present their audits to the Government attorney as soon as practicable, and offer to make their books and records available so that their accounting statements can be checked. Often counsel will find that the task is one that can be taken over almost completely by the accountants, with the need to refer to counsel only when basic theoretical accounting or legal principles and differences are involved. Practitioners familiar with the practice under the Federal Rules frequently assume that the pretrial deposition procedure for discovery purposes so widely employed thereunder can similarly be used in a Court of Claims proceeding. However, this is not the case. Depositions are used in Court of Claims proceedings only in connection with the conduct of the actual trial and then only in exceptional circumstances, such as where it is not practical for the testimony to be taken in the normal manner before the Commissioner." They are not used for discovery purposes. The taking of testimony out of order at a distant place at a time before the regularly scheduled trial and for the purpose of preserving the testimony, or the obtaining of testimony in foreign countries, are examples of situations where they are sometimes permitted. Special leave to so proceed must be obtained from the Commissioner or the Court. One final word as to pretrial. While the Rules of the Court provide for all aspects of it-conferences at the Court, discovery, calls, admissions, stipulations, and audits-it should be realized that it is not necessary for counsel to sit back and wait until the Commissioner initiates and orders the procedure. Almost every phase of pretrial procedure covered by the Rules can be undertaken voluntarily and informally by counsel meeting directly with each other and without the intervention of the Commissioner. Frequently counsel make unnecessary See The Executive's Right of Privacy, 66 Yale L. J. 477 (1957); Extent of Governmental Immunity From Rule 34, 41 Va. L. Rev. 507 (1955). United States v. Reynolds, 345 U.S. 1 (1952). See Evans, The United States Court of Claims, 17 Fed. B. J. 85, 97-99 (1957). BS Rule 29. |