United States Fidelity & Guaranty Co. v. United States Ex Rel. Struthers Wells Co.
Headline: Court refuses to apply 1905 contractor-payment amendment retroactively, letting a material supplier sue under the earlier law in the New York district and preserving pre-amendment rights.
Holding:
- Allows suppliers to sue under pre-amendment law for contracts made before the amendment.
- Limits the 1905 law to contracts and bonds created after its passage.
- Preserves venue and timing rights for claims vested before the amendment.
Summary
Background
A contractor named Flaherty made a contract with the United States on December 10, 1903. The Struthers Wells Company supplied materials in March 1904. Congress amended an 1894 law on February 24, 1905, changing who could sue, where suits could be brought, and giving the United States a priority. The supplier began its suit on April 12, 1905, in the Eastern District of New York, and the question was whether the 1905 amendment applied to this case.
Reasoning
The Court asked whether Congress meant the 1905 amendment to apply to contracts and bonds already in existence. It stressed a strong rule against making laws work retroactively unless Congress clearly says so. The Court noted that the amendment changed substantive rights — for example, it delayed a supplier’s right to sue until after contract completion and six months, and it gave the Government priority — and therefore it concluded Congress intended those changes to operate only for future contracts and bonds. The Court also declined to split a single amended section so some parts would be retroactive and others prospective.
Real world impact
Because the contract, bond, and the supplier’s rights vested before the 1905 amendment, the Court held the amendment did not apply to this dispute. The supplier’s suit in the Eastern District of New York could proceed under the previous law. The Circuit Court of Appeals’ judgment was affirmed, leaving pre-amendment claims governed by the old rules.
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