The opinion of the court was delivered by: Juergens, Chief Judge.
Plaintiff asserts that the complaint states a cause of action
for breach of contract in Count I and for the taking of
plaintiff's property without due process of law in Count II and
that defendant TVA has filed a counterclaim against plaintiff
for breach of contract.
Plaintiff raised certain matters under the provisions of the
"disputes" clause of the contract and subsequently appealed
that decision as provided in the contract. Plaintiff now
contends that the "disputes" clause is invalid and the hearing
procedure before the representative of the General Manager was
improper, a denial of due process of law under the Fifth
Amendment and to fair dealing under the Ninth Amendment and
that he participated in the hearing under protest; that after
receiving the adverse decision, plaintiff filed this suit for
breach of contract and unlawful taking.
In support of his position, plaintiff contends that the
corporation involved is not the United States; that the United
States is not the proper party; that plaintiff is entitled to a
jury trial under the Seventh Amendment; that TVA is not
entitled to use the goverment "dispute" clause procedure
because such procedure is available only to the United States;
that the "dispute" clause is invalid and unconstitutional; and
that the cause is in reality an action for breach of contract.
Plaintiff is correct in alleging that TVA is not the United
States Government. However, TVA is a wholly owned government
corporation, managed by directors to be named by the President
and approved by the Senate. The directors have authority to
employ attorneys, define their duties and TVA may sue and be
sued in its corporate name. In the TVA Charter, it is provided
that offenses against it shall be deemed the same as offenses
against the United States and all the land acquired by it is in
the name of the United States. Actually the TVA is the United
States in action, "an arm of the government," and an agency
performing wholly governmental service. TVA Charter, 16
U.S.C.A. § 831 et seq. Ramsey v. United Mine Workers of America, 27
F.R.D. 423 (E.D.Tenn.S.D., 1961).
Plaintiff also urges that defendant is attempting to resubmit
the same issues heretofore presented in its motion for summary
judgment and charges that the Court ruled adverse to
defendant's present position as shown by the Court's previous
ruling when it denied summary judgment. Such is not the case.
The Court previously held that defendant had not shown that
there was not in dispute any material fact, which is a
prerequisite to granting a motion for summary judgment. The
question as to whether plaintiff is entitled to a jury trial
was not before the Court and was accordingly not presented nor
decided at that time.
The Court has re-examined the entire matter in the light of
defendant's motion to strike the jury demand and finds that the
matters presented must properly be pursued under the provisions
of the "disputes" clause of the contract. Therefore, this Court
is in effect restricted to review status merely and is not
justified in granting a trial de novo. Such being the case,
defendant's motion to strike the jury demand is proper and
defendant's motion to strike plaintiff's demand for jury trial
will be and the same is hereby granted and plaintiff's demand
for jury trial is stricken.
SUPPLEMENTAL MEMORANDUM AND ORDER
The contract in question contains a dispute clause which
provides for the disposition of all disputes in accordance with
specified procedures and further provides that the parties are
to be bound by the resulting decision reached in those
The procedures outlined in the contract were originally
followed. It was then appealed. A hearing officer found
adversely to plaintiff and allowed defendant's counterclaim for
excess cost of coal purchased in October, 1966, in the amount
of $70,663.04 to replace the deficiencies in plaintiff's
account and defendant's claim for excess cost of coal purchased
in March, 1967, in the amount of $39,672.00. Defendant was
further permitted to apply unpaid invoices in the amount of
$19,389.40 to partially offset the excess cost to defendant.
The administrative procedures having been exhausted, plaintiff
then filed his complaint in this court.
The function of reviewing an administrative decision can be and
frequently is performed by the court of original jurisdiction
as well as by an appellate tribunal. The standards of review
adopted are whether or not the decision as rendered is
"arbitrary," "capricious" and "not supported by substantial
evidence." The term "substantial evidence" in particular has
become a term of art to describe the basis upon which the
administrative record is to be judged by a reviewing court.
This standard goes to the reasonableness of what the agency did
on the basis of the evidence before it, for a decision may be
supported by substantial evidence even though it ...