Case Name: Bata Shoe Co. v. United States
Court: United States Customs Court
Jurisdiction: United States
Decision Date: 1938-10-17
Citations: 1 Cust. Ct. 189
Docket Number: 
Parties: Bata Shoe Co. v. United States
Judges: Before McClelland, Sullivan, and Brown, Judges; Brown J., concurring
Reporter: United States Customs Court Reports
Volume: 1
Pages: 189–204

Head Matter:
Bata Shoe Co. v. United States
United States Customs Court, First Division
(Decided October 17, 1938)
Strauss & Hedges (John Francis Strauss, Allan R. Brown, and Eugene F. Blauvelt of counsel) for the plaintiff.
Joseph R. Jackson, Assistant Attorney General (Marcus Higginbotham, Jr,, special attorney), for the defendant.
Before McClelland, Sullivan, and Brown, Judges; Brown J., concurring
C. D.45.

Opinion:
McClellaNd, Presiding Judge:
The merchandise which is the subject of this protest consists of what are known as McKay sewed shoes which were assessed with duty at the rate of 30 per centum ad valorem under paragraph 1530 (e) of the Tariff Act of 1930 as amended by the Presidential proclamation published in T. D. 45311. The claims in the protest as originally filed within the statutory time allowed therefor after the liquidation of the entry covering the involved merchandise, were as follows:
The reasons for objection, under the Tariff Act of June 17, 1930, are as follows:
Said merchandise is covered by, and is dutiable under, Par. 1530 (e) at only 20% ad val., or at only 10% ad val. by virtue of the Presidential Proclamation of December 2, 1931 (T. D. 45311). If said merchandise is not dutiable at 10% ad val. as above claimed, it is further and alternatively claimed that any order, finding, or proclamation, including the Presidential Proclamation aforesaid, authorizing or purporting to authorize the imposition of any higher duty than that provided in said Par. 1530 (e) or in effect changing the classification provided in said Par. 1530 (e), is illegal, null, and void. It is not warranted by Section 336 or other provision of law. The duty fixed in said Par. 1530 (e) equalizes the difference in cost of production, in the United States and in the principal competing country, of the merchandise covered by the classifications of said Par. 1530 (e). In any event any statute purporting to authorize the issuance of any order, finding, proclamation, or other act raising or purporting to raise any duty or changing or purporting to change any classification fixed in said Par. 1530 (e) is illegal, unconstitutional, null and void. It is unconstitutional in that the enactment of such provision is beyond the powers granted to Congress by the Constitution of the United States, in that it constitutes the taking of the property of the citizen without due process of law and in that it constitutes an unlawful delegation of the taxing power. You should reliquidate in accordance with the above claims.
Subsequently, and under the provision in section 518 of the Tariff Act of 1930 and rule 9 of this court, a motion to amend the said protest was, over objection by defendant's counsel, granted, such amendment, so far as pertinent, being as follows:
Now come Strauss and Hedges, Attorneys for the above named and, prior to the first docket call of the above entitled protest, move the Court for an order directing that said protest be amended as follows:
By adding the following after the sentence "It is not warranted by Section 336 or other provision of law":
The duty is not expressly fixed by statute within the meaning of said Section 336.
After the next sentence insert the following:
The investigation, hearing, finding, and report of the Tariff Commission are based on a wrong principle, contrary to law, illegal, null, and void. Error is specifically alleged in that the actual values at the time of exportation or importation were not taken; that values at an earlier date were taken; that values as of a period prior to the passage of the Tariff Act of 1930 were taken; that the cost comparisons were based upon insufficient, improper, and unrepresentative samples; that the cost comparisons -were based upon average costs for different merchandise; that the rate of advance in duty was calculated upon average costs for different merchandise; that the segregation of the merchandise into different classes was arbitrary and without authority of law. Error is further specifically alleged in that the actual values upon which duty is taken and the actual duties and taxes paid upon importation of the merchandise are higher than the values, duties, or taxes considered and calculated by the Tariff Commission in comparison of costs. It is further alleged that the "representative period" adopted by the Tariff Commission in its investigation was not in fact or law representative and that the conclusions drawn therefrom are not applicable to or representative of conditions at the time of these shipments.
, The appraiser's special report to the collector, which was filed within ninety days after the lodging of the protest, and therefore may be considered as evidence, reads as follows:
The merchandise in question consists of shoes made wholly or in chief value of leather, not specially provided for, sewed or stitched by the process or method known as McKay. It was returned for duty at 30% ad valorem under paragraph 1530 (e) Act of 1930. Note the Presidential Proclamation, T. D. 45311 Note also T. D. 42706.
There is no testimony in the record, only questions of law being involved.
In their order as developed the objections to the collector's classification may be stated and disposed of as follows:
(1) That Senate Resolution 295 of the 71st Congress, second session, which includes "shoes, men's and women's shoes" was illegal. Said resolution reads as follows:
Resolved, That the Tariff Commission is hereby directed to investigate the differences in cost of production between the domestic article and foreign article and to report upon the earliest date practicable upon the following articles: Shoes, both men's and women's shoes; furniture, bells; wire fencing; wire netting; cement; hose; shovels; spades; scoops; forks; rakes; scythes; sickles; grass hooks; corn knives; and drainage tools.
This request is made under and by virtue of section 336, and the following sections of the new tariff act, passed and approved on the 17th day of June 1930.
It is urged by plaintiff's counsel that this resolution is void ab initio for the reason that it was introduced in the Senate on June 17, 1930, the day on which the Tariff Act of 1930 was approved by the President, but one day before it became operative, and it is contended that there was no statutory authority for the resolution. We find no authority cited to support this contention, but since the resolution was offered on the same day as the tariff act was approved, such approval by the President being at 12:59 p. m., it is a reasonable assumption, inasmuch as it was determined by resolution on the convening of the Senate at the first session of the 71st Congress that the Senate should meet at the hour of 12 o'clock meridian, that Senate Resolution 295 was adopted after the approval of the tariff bill, and we are without doubt that the Senate possessed the unquestionable right to pass any resolution it might desire under section 336 following it's approval, regardless of the fact that the tariff act did not become operative until the day following.
(2) The second objection to said Senate Resolution 295 is that while section 336, supra, authorizes the investigation of the differences in the cost of production of "any domestic article and of any like or similar foreign article," the Senate Resolution authorized, in addition to shoes, investigations with regard to furniture, bells, wire fencing, wire netting, cement, hose, shovels, spades, scoops, forks, rakes, scythes, sickles, grass hooks, com knives, and drainage tools, and it> is contended that in framing section 336 such blanket resolution was not within the contemplation of Congress.
No authorities are cited in support of this objection, and it is our view that it is untenable and without merit. We can see no valid reason why separate resolutions should have been made with regard to each of the articles named.
(3) The third ground of objection is that the investigation by the Tariff Commission and the proclamation of the President were illegal for the reason that the McKay sewed shoes in issue are not within the purview of section 336 of the Tariff Act of 1930 inasmuch as they are not subject to changes in rates because they are not expressly provided for. In other words, it is the evident contention here of plaintiff that under the provisions of section 336, supra, changes in rates of duty as the result of an investigation by the Tariff Commission and a proclamation of the President can only be made as to articles specifically provided for eo nomine in the tariff act.
As in the case of the previous two objections, no authority Is cited in support of this contention, and we think Congress manifested no such limitation as thus contended for. The analogous section to section 336 of the Tariff Act of 1930 was section 315 of the Tariff Act of 1922. That section provided for "changes in classifications or increases or decreases in any rate of duty provided in this act," while section 336 (a), supra, provides for "increases or decreases in rates of duty expressly fixed by statute (including any necessary change in classification)." Plaintiff contends that the change in language indicates an intent on the part of Congress to confine any change made during the fife of the Tariff Act of 1930 to goods "expressly provided for." It will be noted that the words "expressly provided for" do not appear in the excerpt quoted above from section 336 (a). The words "expressly fixed by statute" found therein relate to rates oj duty, and there can be no doubt that as applied to the McKay sewed shoes in issue the rate of duty had been "expressly fixed by statute" under the provision in paragraph 1530 (e) of the Tariff Act of 1930 for "boots, shoes, or other footwear made wholly or in chief value of leather, not specially provided for."
(4) The fourth objection is that the Tariff Commission's investigation, hearing, and report, which formed the basis of the Presidential proclamation, were illegal and therefore invalid.
Five reasons are cited why it is claimed that the Tariff Commission's investigation, hearing, and report were illegal.
The first is "because reasonable public notice was not given as required by section 336," and under this heading it is pointed out that the notice, which is to be found on pages 28 and 29 of the weekly TeeasuRV Decisions dated August 28, 1930, Vol. 58, No. 9, refers only to "boots and shoes" and not to the only class of boots and shoes upon which the rate of duty was raised, i. e., McKay sewed boots and shoes.
In our view the decision of the Court of Customs and Patent Appeals in Lord & Taylor v. United States, 26 C. C. P. A. 151, C. A. D. 9, is ample authority for holding that the quoted reason for the objection is without merit. Judge Bland, writing the unanimous opinion of the court in that case, said:
The law is well settled that a notice relating to proceedings such as are here under consideration, if sufficient "to excite attention and put the party on his guard and call for inquiry, is notice of everything to which sti'cH' inquiry mighthave led." It follows that when "a person has sufficient information to lead him-to a fact, he shall be deemed conversant of it." United States Trust Co. v. David, 36 App. D. C. 549; Wood v. Carpenter, 101 U. S. 135. See also Shaur v. Allerton, 151 U. S. 607, where substantially the foregoing rule was announced under some-what different circumstances. Also see Tagg Bros. et al. v. United States el al.,. 280 U. S. 420.
Surely a manufacturer or importer of McKay sewed boots and shoes: should have been placed upon inquiry by a notice relating to a Tariff Commission investigation with regard to boots and shoes.
The second reason given is "because the statutory requirement of the existence of a domestic article comparable with the imported-article was lacking." Under this beading plaintiff's counsel state' in their brief the following:
The Tariff Commission's report, page 8, indicates that there is a considerable-importation but no domestic production of shoes with'molded soles and woven' leather uppers. Therefore boots and shoes are not within the purview of Section 336, because the flexible tariff provisions demand the existence of a domestic-' article the cost of which is to be compared with the foreign article.
In our view it does not follow that because one type of shoe is not-manufactured in the United States all boots and shoes are excluded! from the purview of section 336, supra. That section requires that there be a domestic article the cost of production of which is to be' compared to that of a like or similar foreign article. It will be'noted, that there is no claim that McKay sewed boots and shoes, the' type-here in issue, were not manufactured in the United States. The-objection must fall for lack of merit.
The third reason given is "because the report shows on its face that there was in fact no investigation of at least part of the articles supposed to be under investigation."
We are unable to see any reason why, if the foregoing be true, it should form any basis for holding that the investigation, hearing, and report of the Tariff Commission was illegal as applied to the shoes in this case. It is not disputed that there was an investigation, hearing,, and report with regard to the type of shoes here in issue.
The fourth reason given is because "the investigation did not conform to the Senate resolution directing the investigation." It is' pointed out that the Senate resolution authorized an investigation with regard to "shoes, both men's and women's shoes," while the-notice of the Tariff Commission announced an investigation with, regard to "boots and shoes," and that the scope of the latter includes; other than men's and women's shoes.
In this connection it is to be observed that under section 336 (a)1,. supra, investigations may be made by the Tariff Commission (l)1 upon request of the President, (2) upon resolution of either or both Houses of Congress, (3) upon its own motion, or (4) when in the judgment of the Commission there is good and sufficient reason therefor, upon application of any interested party. There is nothing in the notice of investigation caused to be published by the Tariff Commission in the weekly Treasury Decisions of August 28 and September 4, 1930, to indicate that insofar as the scope of the investigation exceeded the scope of the Senate resolution which initiated it, such excess was not authorized by the Commission's own motion, and since the Commission had the authority so to do it must be presumed that the Commission acted in accordance with law. Manifestly, insofar as the scope of the investigation was within the scope of the resolution, there can be no objection.
The fifth reason given is "because the requirements of the statute were not complied with." All of the facts alleged under this heading relate to the proceedings had by the Tariff Commission, which, as held by the Court of Customs and Patent Appeals in William A. Foster & Co., Inc., et al. v. United States, 20 C. C. P. A. 15, T. D. 45673, is not a subject for review by this court.
(5) The fifth objection stated is that "The proclamation of the President relied on herein by the collector was illegal, null, and void because the President never had before him the facts of the investigation by the Tariff Commission even though said investigation were legal." It will be sufficient to say that this objection was considered •at the time plaintiff's counsel moved for transfer of the case to Washington, D. C., in order to take the testimony of the Secretary •of the Tariff Commission and other witnesses on the question of whether all the facts before the Tariff Commission were submitted by it to the President, our decision thereon being reported in T. D. 48837. Por the reasons there given we must hold the objection to be without merit.
(6) The last objection stated is that "Section 336 is unconstitutional in that it is a delegation to the President of the legislative power, particularly the taxing power, it constitutes the taking of the property of the citizen without due process of law and is beyond the powers granted to Congress. The Collector has taken the property of the citizen without due process of law."
The precise issue thus raised was passed upon by this court and the Court of Customs and Patent Appeals, and the latter tribunal, in United States v. Sears, Roebuck & Co., 20 C. C. P. A. 295, T. D. 46086, squarely held that the provisions of section 336, supra, do not purport to delegate legislative power to the President.
Por the foregoing reasons all of the claims stated in the protest must be overruled and the decision of the collector affirmed. Judgment will issue accordingly.