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Despite the numerical reduction in cases assigned to the Admiralty and Shipping Section, the actual workload has increased and will continue to increase because the cases now being received involve, as an average, much larger claims, and many new cases also involve precedent questions of law which will have a substantial and continuing effect upon the interest of the United States.

The Government has reduced the number of public-owned merchant-type vessels directly operated by it and has replaced them with privately owned vessels chartered for Government transportation. This has resulted in an increasing number of complicated charter suits against the United States seeking very substantial judgments in almost every case.

A series of cases just started grew out of the ship mortgage insurance program. The Government to date has guaranteed the sum of $427 million in loans under this program, which is designed to encourage participation and investment in experimental shipping operations as well as to rehabilitate depressed shipping companies. In instances where such operations experience financial and operational difficulties, the Government must repossess vessels in complex admiralty proceedings and thereafter take over and endeavor to work out reorganization or bankruptcy arrangements, including the adjustment of a great variety of rights and claims of a substantial nature, in an attempt to minimize losses and at the same time sustain the Government's objeetive of establishing a strong competitive American merchant marine.

The worldwide activities of the merchant marine and the Navy have brought forth cases involving difficult questions of international law and conflict of laws, and the St. Lawrence Seaway, in the infant stage of its operation, has already produced a substantial amount of litigation involving important, novel problems.

The expanding geographic dimensions of the work is, in itself, another factor which contributes to the growing expenses which must be incurred in conducting admiralty litigation. Admiralty and shipping cases throughout the United States, in State as well as Federal courts, constitute a highly integrated litigation activity. Both practical administration and adequate protection of the Government's interests in admiralty litigation require that virtually all cases be handled by the lawyers of this Section because of the specialized nature of the cases and their implications with respect to the policies and problems of the Government in its admiralty and shipping operations.

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One additional position is being requested for the Appellate Section in 1962 which will do no more than maintain the staff at the basic level of the past 6 years. Not only has appellate work increased as major civil litigation has grown in relative volume, but the transfer of an entirely new type of work from the Antitrust Division has put an additional burden on this staff. In the past year, 59 “antitrust" cases were handled by the Section and at least that number can be counted on in fiscal 1962.

The time limits of appellate courts demand the most expeditious handling by attorneys who not only have a wide grasp of general procedural and substantive law but specialized knowledge in many governmental fields. A smaller or less expert staff could not possibly meet the daily deadlines and still maintain the level of quality and effeetiveness essential in cases which determines or affect the rights and monetary interests of the United States in related pending cases and future litigation and, in many cases, affect the policy of the De partment and the policies and administrative programs of the Government.

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Three additional positions are being requested in 1962 for the Court of Claims Section. This would bring the staff up to 40 attorneys, but not up to the number assigned to this work during 1956, 1957, and 1958.

On July 1, 1960, this Section had 1,118 cases in litigation, involving 5,438plaintiffs claiming in excess of $269 million. Each attorney, therefore, has an average of 30 cases in various stages of trial or preparation. It is almost a physical impossibility for them to meet the accelerated trial schedules imposed on them even with the bastiest preparation. The huge potential loss to the Government which will almost certainly result from not being able to prepare these cases adequately has been stressed for some years. The Bureau of the Budget and the House Appropriations Committee have demonstrated that they understand this situation and four new positions were allowed for the current year.

The Court of Claims, however, estimates that a permanent staff of 65 attorneys in the Court of Claims Section is needed to keep abreast of the court's work. The court has been extremely lenient and understanding in granting extensions of time only because of its intimate knowledge of the impossibilities of the situation, but the court repeatedly states that it is being forced to balance claimants' rights and the Government's fiscal interests against the unreasonableness of the demands upon the Section's attorneys. This continuous pressure creates working conditions which discourage the acquisition and retention of competent personnel.

Customs Section

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When the Customs Section was abolished in 1953 and its functions and personnel transferred to the Civil Division, 22 attorneys were handling the defense of all proceedings before the U.S. Customs Court and representing the United States before the Court of Customs and Patent Appeals. Since that time the staff has been gradually reduced until there are only 10 attorneys now handling this work.

While it is true that the Customs Court decides issues controling groups of cases and Customs cases (approximately 200,000 pending) are not tried individually, the large number of issues and the itinerant nature of the court makes practice before it very time consuming. During the past year, there were 87 calendars outside of New York City. It is, of course, necessary that at least one attorney from the Customs Section accompany the court on these dockets. In addition, 133 trials were held by the court at New York and 41 arguments were made before the Court of Customs and Patent Appeals in Washington.

The judges of the Customs Court have complained to the Department and the Congress that the depletion of the staff of the Customs Section has now gone far enough to seriously affect the work of the court. In view of the importance and volume of these cases, the need for two additional positions in 1962 is critical.

6944461--10

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Because the number of attorneys in the Frauds Section was temporarily in. creased for a period of over 3 years, the effect of a few additional attorneys can be measured with some degree of certainty in terms of money recovered and returned to the Treasury. Beginning in 1956 and continuing through 1959, attorneys were transferred to this Section at the expense of other litigation because of an appalling accumulation of inactive civil fraud cases. It was especially apparent in this particular backlog of cases that the Government was suffering serious financial losses as its evidence deteriorated and the collectibility of judgments diminished with the passage of time. In fiscal 1954, 1955, and 1956, a total of $5,643,093 had been collected in civil fraud cases. In 1957, 1958, and 1959, a total of $29,097,465 ? was recovered in civil fraud cases. 1960, the budget allowance made it necessary to reduce the Frauds Section to its former complement. Although the effects of the work of the preceding years carried over to a considerable extent in the collections obtained in 1960, the total collections during 1960 dropped to $4,304,203. No additional positions are being requested for 1962, however, because of the decrease in the caseload.

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Two new positions are being requested for the General Litigation Section be cause of several factors which are producing a rapid rise in the workload.

(1) Effective April 1, 1959, the Attorney General transferred from the Antitrust Division several types of cases which have traditionally been handled by that Division. These include actions brought at the request of the Interstate Commerce Commission to impose civil penalties for violations of the Interstate Commerce Act and the Elkins Act. They also include suits brought by farmers to obtain judicial review of marketing quotas under the Agriculture Adjustment Act, suits to impose civil penalties for violations of that act by farmers, suits to compel compliance with marketing orders issued by the Secretary of Agriculture, and suits challenging the validity of such marketing orders. In the past year 219 new cases of these types were received.

(2) Because of the ever-increasing number of persons covered by the Social Security Act and the fact that with the passage of time the number of persons who attain the age of eligibility for social security benefits will continue to increase, there has been a sharp rise in cases brought to review decisions of the Secretary of Health, Education, and Welfare. Unless more attorneys are assigned to this Section, there will be an increasing timelag in handling these cases. Such delay has serious social consequences because persons who litigate social security claims are widows, dependent children, and disabled persons who in general have meager financial resources of their own.

(3) There has also been an unexpected amount of renegotiation litigation in the Tax Court, which is handled exclusively by attorneys of the General Litigation Section. It was originally anticipated that the Renegotiation Act of 1951 would result in only a relatively small amount of litigation. However, a major difference of profit philosophy between the Renegotiation Board and the airplane

1 This figure should be discounted to the extent that one unusual case resulted in the collection of $9,908,584.

industry has caused the filing of 22 airplane cases involving determinations of excessive profits in the amount of $103,534,165. The preparation and trial of cases of this size and complexity require not only a large amount of attorney time but also require an attorney with an extensive background in corporate financing.

No funds are included in this budget for the additional burden which inevitably will be brought about by the passage of the Labor-Management Reporting and Disclosure Act because it is too early to estimate the volume of cases which will be referred from the Labor Department or the number of attorney's required and the amount of litigation expense the Civil Division will incur.

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For the past 5 years a request has been made for more attorneys for the Government Claims Section, yet no additional funds have ever been allotted for this important work. The huge losses being sustained through the failure to press a major portion of the Government's claims is very similar to the situation described in the above statement regarding the Frauds Section. It is obvious that the only way a staff of 10 attorneys can handle these thousands of claims, involving over a hundred million dollars, is by very general advice and hurried supervision, yet they are necessarily held accountable for any neglected cases or poor litigation results. U.S. attorneys cannot be given the assistance they ask for although this assistance is essential to the effective prosecution of many types of Government claims.

Two additional attorneys are again requested for this section.

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The staff of the Patent Section is now down to 14 attorneys, the smallest staff in the past 10 years. The two positions requested would restore the Section to its former complement.

While the number of cases has remained fairly constant, the workload has become increasingly important and complex each year because of the nature and significance of the technology involved and the much larger potential recoveries which may be obtained against the Government. The patent rights in litigation reflect recent scientific advancement in many fields, including some of the most important developments relating to national defense. The high potential recoveries in patent cases are not indicated in the Division's statistics on money involved in patent litigation because many patent claims are necessarily indefinite.

The amount of money which the Government will save through the employment of even two additional patent attorneys can be suggested briefly as follows:

Of the 292 patent cases now pending, 56 assert claims against the Government for just compensation for patent use. Interest will be awarded on judgments obtained in these suits, running from the date each suit was filed. Most patent infringement suits do not allege specific amounts in damages. However, in these 56 cases, specific damages and minimum compensation total over $220 million. If the plaintiffs prevail in one-fourth of these cases (a conservative estimate) the total judgments will amount to at least $55 million. Computing interest at 5 percent on these judgments, a 1-year acceleration in the disposition of these cases would save the Government over $2,750,000.

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A special factor in the increasing workload covered by Torts Section attorneys is that, although originally intended to be almost entirely a supervisory section, the staff has had to undertake the trial of more and more cases each year. Principally because of recent court decisions, there has been a material increase in “disaster" litigation and multiple jurisdiction cases. Virtually all of these cases must be handled completely by attorneys of the Torts Section. A simple example is an airplane crash involving 38 deaths resulting in 38 lawsuits in 12 judicial districts. It would be impossible for 12 different C.S. attorneys to conduct this litigation effectively.

Because of the nature of the cases which now are developing under the Federal Tort Claims Act as a result of the more liberal reading of the act by the appellate courts, U.S. attorneys' offices have been relying upon the Torts staff for much more assistance than was formerly given. It is highly important to the Government that this specialized, expert counsel be given to the U.S. attorneys to prevent the establishment of highly expensive precedents expanding Government liability. In order to do this, the staff of the Torts Section must be kept at the present level.

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It is believed that the workload of this section will remain fairly fixed for the budget year unless legislation to provide judicial review of Veterans' Adminis tration decisions to gratuitous benefits is enacted. The present staff, therefore, can provide adequate supervision over the C.S. attorneys, who handle the large majority of these cases.

FOREIGN LITIGATION When the Civil Division was first concerned with litigation in foreign courts, it was not possible to forecast the expenses which would be incurred because of the entirely different systems used in the various countries governing legal fees, assessment of court costs, deposit requirements, and miscellaneous litigation expenses. However, the experience of the last 4 years has shown that these expenses have averaged $170 per case. If the number of new cases increased only slightly by 1962 (an increase must be anticipated in view of the Government's continuing oversea activities), the Civil Division will have a caseload of approximately 600 cases. At an average cost of $170 per case, the reqnested $100,000 for the budget year is the minimum which should be provided for fees of foreign counsel and other expenses of foreign litigation.

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