Court Opinion

ID: 9445649
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:35:27.473022+00
Date Added: 2024-06-11T17:30:21.419057
License: Public Domain

JAMES ALGER FEE, Circuit Judge
(dissenting).
The main opinion is erroneous because it apparently decides that the construction of the statute and regulations which is there adopted in 1957 would override a consistent long standing administrative interpretation by the federal agency itself.
This statute and the applicable regulations are not so plain in the commands thereof to leave nothing for construction. Indeed, these were construed contrary to our present interpretation in 1926 by the opinion in John J. Roche Co. v. Eaton, 9 Cir., 14 F.2d 857. This theory was affirmed and adopted by a District Court in 1954 in Johnnie & Mack, Inc., v. United States, 123 F.Supp. 400.
The main opinion here resolves the matter as if the case were of first impression. So does the decision in United States v. Keeton, 4 Cir., 238 F.2d 878. But in the instant case the point was squarely raised that the agency had acquiesced in the construction of the statute in the Roche case for a period of over twenty-five years and, as a result, had left untaxed installers of seat covers on automobiles. It was also contended that this course of action was summarily reversed after the bulletin of August, 1952, by the identical agency. It may be agreed that the evidence was insufficient in the instant case. But the exact contention has been raised in other eases',notably, Martin v. Andrews, 9 Cir., 238 F.2d 552, where we held that the suit was premature and where the merits were not considered. We should not bind all of the judges of this Court to our present interpretation in other causes where more evidence of contrary administrative practice might conceivably be produced.
It may be said that the main opinion does not rule upon the administrative practice. True, it does not in so many words. But we should not disapprove of the long standing judicial construction initiated by the Roche case and brought up to date in the Johnnie & Mack case. If the agency were proven to have acquiesced therein, it might be possible that such an acceptance of the rule might be binding upon not only the agency, but also upon this Court. Then we should not hold that the bulletin of August 18, 1952, is the only public ruling which deals specifically with the type of transaction in this litigation here. It may be the only one in this record. Besides, there might be debate as to how “public ruling” should be defined. Further, simply because we have construed the statute and regulations as res nova, we should not construe other pronouncements of the bureau as dealing with collateral matters in virtue of our construction. It might be possible to show that all the action and inaction of the agency in this field is consistent with an interpretation binding upon us and inconsistent with our present holding on the letter of the statute and regulations. Again, no “private rulings” are found to be in the record. But there should be no intimation of an estoppel or waiver based upon knowledge or lack of knowledge. Finally, the inaction of the agency and their failure to collect taxes from or prosecute installers of seat covers over a limited area should be treated as of great importance. Instead, the practice *106in the limited area seems to be treated as of no consequence.
It is conceivable, if all these elements were connected to show a national policy of the agency over a long period of years, supported by judicial holdings initiating the construction and tying into the practice, an administrative construction might be shown by the evidence in another case. We would not have then the excuse that the matter had not been brought to our attention here. See United States v. Leslie Salt Co., 350 U.S. 383, 397, 76 S.Ct. 416, 100 L.Ed. 441, Note 13.
The following excerpt from this case 350 U.S. at pages 396-397, 76 S.Ct. at page 423 is pertinent:
“There are persuasive reasons for construing ‘debentures’ and ‘certificates of indebtedness’ in accordance with the Treasury’s original interpretation of those terms in this statute’s altogether comparable predecessors. In Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 358, 77 L.Ed. 796, Mr. Justice Cardozo said:
“ ‘administrative practice, consistent and generally unchallenged, will not be overturned except for very cogent reasons if the scope of the command is indefinite and doubtful. United States v. Moore, 95 U.S. 760, 763, 24 L.Ed. 588; Logan v. Davis, 233 U.S. 613, 627, 34 S.Ct. 685, 58 L.Ed. 1121; Brewster v. Gage, 280 U.S. 327, 336, 50 S.Ct. 115, 74 L.Ed. 457; Fawcus Machine Co. v. United States, 282 U.S. 375, 51 S.Ct. 144, 75 L.Ed. 397; Interstate Commerce Comm. v. New York, N. H. & H. R. Co., 287 U.S. 178, 53 S.Ct. 106, 77 L.Ed. 248. The practice has peculiar ' weight when it involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new.’
“Against the Treasury’s prior longstanding and consistent administrative interpretation its more recent ad hoc contention as to how the statute should be construed cannot stand. Moreover, that original interpretation has had both express and implied congressional acquiescence, through the 1918 amendment to the statute (76 S.Ct. 421), which has ever since continued in effect, and through Congress having let the administrative interpretation remain undisturbed for so many years. See Corn Products Refining Co. v. Commissioner, 350 U.S. 46, 53, 76 S.Ct. 20, 24 [100 L.Ed. 29]; Norwegian Nitrogen Products Co. v. United States, supra, 288 U.S. at page 313, 53 S.Ct. at page 357. Still further, it is an interpretation which is in accord with the generally understood meaning of the term ‘debentures.’ Cf. First Nat. Bank of Cincinnati v. Flershem, 290 U.S. 504, 508, 54 S.Ct. 298, 78 L.Ed. 465. ‘The words of the statute [a stamp tax statute] are to be taken in the sense in which they will be understood by that public in which they are to take effect.’ United States v. Isham, supra, 17 Wall. [496] at page 504, 21 L.Ed. 728.”
The cause should be remanded with directions for the trial court to find on the subject upon further evidence, or at least it should be recognized that such expressions are not binding upon this Court in another case.