American Pipe & Steel Corporation v. Firestone Tire & Rubber Company

The district court’s jurisdiction in this case rests on diversity of citizenship. 28 U.S.C. § 1332 . This court’s jurisdiction is conferred by 28 U.S.C. § 1291 .

Defendant-appellee, under contract with the United States, manufactured the “Corporal” missile. Plaintiff-appellant, under contract with appellee, manufactured containers for the missile. Appellee provided appellant with plans for the construction of the containers, the plans calling for the use of torsion bar lever arms, the purpose of which was to hold the missile in place within the container. These arms had a maximum diameter of four inches. Appellee knew (or should have known) that the contract with the government called for five inch diameter bars, and that changes in these plans could only be based on authority obtained from the government to use four inch torsion bars. Such authority was never obtained, and, as a consequence, the anticipated changes had to be made. Effecting the change required appellant to make additional expenditures. Appellee compensated appellant for the cost of the changes (in the amount of $46,259.88), under a provision of the contract requiring it to make an “equitable adjustment” for…