Court Opinion

ID: 9636044
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:14:14.199523+00
Date Added: 2024-06-11T18:09:41.121732
License: Public Domain

HICKENLOOPER, Circuit Judge
(dissenting).
In so far as the foregoing opinion recognizes and affirms the power in Circuit Courts *326.of Appeals to entertain jurisdiction of a petition to review a decision of the Board of Tax Appeals when filed by the Commissioner of Internal Revenue, I am constrained to dissent. In such a proceeding I fail to find the .“case or controversy” necessary as a foundation of judicial action by a constitutional court. It is true that counsel for the taxpayer refused to argue this constitutional question, although requested so to do by the court, and openly conceded jurisdiction, and it is thus unlikely that any attempt will be made to bring the question to the attention of the Supreme Court for decision, and that this dissent is therefore but a vain act; but I nevertheless feel obligated to express the views which I have long entertained, hut for the expression of which necessity has not heretofore arisen.3 . Perhaps in some other case counsel may deem the question worthy of being brought to the notice of the Supreme Court, where I feel it should receive controlling and final consideration.
“The Circuit Court of Appeals is a constitutional court under the definition of such courts as given in the Bakelite Case, supra [279 U. S. 438, 49 S. Ct. 411, 73 L. Ed. 789], and a ease or controversy may come before it, provided it, involves neither advisory nor executive action by it.” Old Colony Trust Co. v. Commissioner, 279 U. S. 716, 724, 49 S. Ct. 499, 502, 73 L. Ed. 918. In that ease a tax had been assessed. Tbe taxpayer had exhausted its remedies before the administrative branch of the government. Except and unless the courts intervened, the tax, which was claimed to be illegal, would be collected. A definite obligation to pay bad already been created, and the existence of a “ease or controversy” was found in the fact that (page 724 of 279 U. S., 49 S. Ct. 499, 502): “In the ease we have here, there are adverse parties. The United States or its authorized official asserts its right to the payment by a taxpayer of a tax due from him to the government, and the taxpayer is resisting that payment or is seeking to recover what he has already paid as taxes when by law they were not properly due.”
But what situation is presented where, as here, the tribunal of final jurisdiction in the administrative branch of the government has spoken, has declared that no tax is due, and has set aside the assessment of the Commissioner? Thereby no obligation to pay has been created — no assessment of tbe tax remains. The only dispute surviving is one between executives in the same general branch of the government, the Commissioner, who maintains that a deficiency should have been assessed, and the Board of Tax Appeals, his administrative superior, which held that it' should not have been. The taxpayer has become merely an interested spectator in this dispute between executives as to the proper performance of their duties; and he is interested, not because his pecuniary affairs are then directly involved, hut, indirectly, because if the only then existing controversy be ultimately determined in accordance with the contentions of the subordinate official, a tax may thereafter be assessed. The settlement of such official disputes in the federal constitutional courts is wholly without precedent.
There can be no question that the Board of Tax Appeals is an executive or administrative tribunal of the government. The language of the act is “an independent agency in the executive branch of the government.” 26 USCA § 1211. In the Old Colony Trust Company. Case, supra, page 725 of 279 U. S., 49 S. Ct. 499, 502, the Supreme Court said: “The Board of Tax Appeals is not a court. It is an executive or administrative board, .upon the decision of which the parties are given an opportunity to base a petition for review to the courts after the administrative inquiry of the Board has been had and decided.” The only function which the Board exercises is purely administrative in character. Unless there has first been a deficiency assessment by tbe Commissioner, tbe Board is without jurisdiction. [Jackson Iron & Steel Co. v. Commissioner, 54 F.(2d) 861 (C. C. A. 6)] ; and the only jurisdiction expressly conferred upon the Board by law is “to redetermine tbe correct amount of the deficiency.” 26 USCA § 1048c.
It is said that both the act and the Old Colony Trust Company Case (by the quotation here last cited) contemplate that the Commissioner shall remain “the authorized representative” of the United States to assert its claim to the tax even after reversal by the Board of Tax Appeals, that the Board is not the administrative superior of the Commissioner, but an independent tribunal exercising judicial or quasi judicial powers in appellate proceedings. Where the action of the Commissioner has been affirmed, in whole or in part, it is proper enough that the Commissioner should remain the spokes*327man oí the government to assert the right to collect the sum found due, hut as such he is merely a formal party. The governmental representative might as well he the Treasurer, the colled or, or any other official whom Congress might care to designate for this purpose. A ease or controversy then exists. But it would seem to me that, after reversal hy the Board, if such action is administrative and not judicial, the Commissioner may be made the “authorized representative” of the United States to continue the ease or controversy in constitutional courts only if the decision of the Board of: Tax Appeals does not act directly upon the assessment, to affirm, set aside, or modify it; that is, only if the decision of the Board is merely advisory, and tiro original assessment continues in full force, unaffected by the Board’s “redetermination.” Perhaps in that event the administrative branch of the government might be said to be still asserting its right to tax and the petition of the Commissioner to be in the nature of an enforcement of this right.
Conceding the fullest degree of the Board’s independence of the Commissioner of Internal Revenue and the Treasurer of the United States, it would seem clear to me that its function is not merely advisory, but that its decision operates directly to affirm, set aside, or modify the assessment of the tax, that the correct amount of the deficiency is thereby administratively “redetermined,” although it may be fixed at nothing, and that, being an “agency in the executive branch of the government” with power to review and revise the action of the Commissioner in the same general branch, and both thus performing administrative functions, the Board can only be considered as the administrative superior of the Commissioner. To regard it as anything else would be to introduce an anomaly into our law, and to run contrary to the principle of strict division of powers into legislative, executive, and judicial. Nor can I recognize any effect in modification of function arising from ihe fact that the Board’s jurisdiction is, in a very true sense, appellate; nor attribute any force whatever to the fact that the Board is not interested in the “collection” of taxes. These matters have to do solely with a distribution of administrative powers among executive officers, and do not affect the fundamental nature of the duties performed. The test remains whether the Board performs supervisory administrative functions.
The view just expressed is supported by the recent decision of the Supreme Court in Federal Radio Commission v. General Electric Co., 231 U. S. 461, 467, 50- S. Ct. 389, 390, 74 L. Ed. 969, where it was said (the italics are mine): “We think it plain from this resume of the pertinent parts of the act that the powers confided to the commission respecting the granting and renewal of station licenses are purely administrative, and that, the provision for appeals to the Court of Appeals does no more than malee that court a superior and revising agency in the same, field. The court’s province under that provision is essentially the same as its province under the legislation which up to a recent date permitted appeals to it from administrative decisions of the Commissioner of Patents.” What is there said with reference to the Court of Appeals of the District of Columbia applies with equal force to the Board of Tax Appeals. I cannot see that the questions there involved were any more or less “purely administrative” than those decided by the “Board of Tax Appeals. Both are interested only in the execution and administration of the acts of Congress. See, also, Butterworth v. United States ex rel. Hoe, 112 U. S. 50, 60, 5 S. Ct. 25, 28 L. Ed. 656.
Does it in any way affect the situation that the Board of Tax Appeals is called upon, in the performance of its administrative duties, to exercise judicial or quasi judicial functions? I think not. This is no more than has been done by other administrative officers, boards, and commissioners since the very inception of our government; and since the early ease of United States v. Ferreira, 13 How. 40, 48, 14 L. Ed. 42, and even before that time, it has been consisiontly recognized that this neither invalidates the administrative action, as in effect constituting a delegation of judicial powers to an executive officer, in the constitutional sense, nor gives to Congress the power to require constitutional courts to review the administrative decisions so reached. In United States v. Ferreira, supra, the court says, in eom-meniing upon the executive exercise of the judicial function: “The powers conferred by these acts of Congress upon the judge as well as the Secretary, are, it is true, judicial in their nature. For judgment and discretion. must be exercised by both of them. But it is nothing more than the. power ordinarily given by law to a commissioner appointed to adjust claims to lands or money under a treaty; or special powers to inquire into or decide any other particular class of controversies in which the public or individuals *328may be concerned. A power of this description may constitutionally be conferred on a Secretary as well as on a commissioner. But is not judicial in either case, in the sense in which judicial power is granted by the Constitution to the courts of the United States.” See, also, Reetz v. Michigan, 188 U. S. 505, 507, 23 S. Ct. 390, 47 L. Ed. 563; Tracy v. Commissioner, 53 F.(2d) 575, 578 ,(C. C. A. 6).
Thus we see that, in spite of its independence of other administrative departments, bureaus, or officers, and its exercise of judicial functions in the performance of the duties imposed upon it, the Board of Tax Appeals cannot be considered as other than an administrative agency, the superior of the Commissioner of Internal Revenue ■ in the-same field. The question remains whether Congress may authorize and require a review- by constitutional courts of the United States, of the administrative action of the Board, where, by virtue of the very action to be reviewed; the assessment has been nullified and no obligation to pay a tax exists. In my-opinion, this question must be answered in the negative. Where a federal administrative decision creates no pecuniary obligation Apon the part of the petitioner or appellant, or denies no clear right to a citizen and litigant, in which he is protected by the constitution or laws of the United .States, no “ease or controversy” in the constitutional sense can exist as -between such citizen and the federal government. A difference of opinion may exist between the citizen and a subordinate federal officer, and between superior and subordinate federal officers, as to the proper intent, scope, and effect of legislation, but •this' does not constitute a “case or controversy.” Under such circumstances, an appeal or right -of review may be given to legislative courts, but, in the language of the Supreme Court, constitutional courts “cannot be invested with jurisdiction of that character, whether for purposes of review or otherwise.” Federal Radio Commission v. General Electric Co., supra (page 469 of 281 U. S., 50 S. Ct. 389, 390). See, also, Keller v. Potomac Electric Power Co., 261 U. S. 428, 442-444, 43 S. Ct. 445, 67 L. Ed. 731; Muskrat v. United States, 219 U. S. 346, 360, 361, 31 S. Ct. 250, 55. L. Ed. 246.
No good purpose would be served by reviewing in detail the numerous decisions upon this subject. To do so would extend this dissent beyond its proper confines. It should suffice to say that, as I view the situation, a petition to review the action of an administrative board or commission, under the circumstances here noted, must be classified either as an appeal to a constitutional eourt in, and as a.part of, an administrative proceeding, or as a means for obtaining from the constitutional courts a purely advisory or declaratory judgment which may guide the administrative officers in the then present and future exercise of their duties. No other alternative has been suggested. Under neither view can this eourt be invested with jurisdiction. As to declaratory judgments, see particularly Muskrat v. U. S., supra; Liberty Warehouse Co. v. Grannis, 273 U. S. 70, 47 S. Ct. 282, 71 L. Ed. 541; Willing v. Chicago Auditorium Association, 277 U. S. 274, 48 S. Ct. 507, 72 L. Ed. 880. As to advisory judgments, if any true difference exists in connection with administrative affairs, see Hayburn’s Case, 2 Dall. 409, 1 L. Ed. 436; United States v. Ferreira, 13 How. 40, 14 L. Ed. 42; and a completely unbroken lina of authorities down to the present date. As to appeals for administrative purposes,, as such, see Federal Radio Commission v. General Eleetric Co., supra; Postum Cereal Co. v. California Fig Nut Co., 272 U. S. 693, 47 S. Ct. 284, 71 L. Ed. 478 ; Keller v. Potomac Electric Power Co., supra.
The indication from each and all of these controlling authorities, in my opinion, is that this eourt should refuse to accept jurisdiction of a petition to review brought by the Commissioner of Internal Revenue. It is at least a striking coincidence that in tlie only three Supreme Court eases -brought to our notice which refer to or discuss the constitutionality of an appeal or review of administrative aetion sought by a federal officer or commission functioning in the legislative or administrative field,4 and here exactly comparable to fhe Commissioner of Internal Revenue, the Supreme Court has denied to Congress the right to provide for such review by federal courts created under article 3, section 1, of the Constitution. United States v. Ferreira, supra; Keller v. Potomac Electric Power Co., supra; Federal Radio Commission v. General Electric Co., supra. I see no reason to depart from the course so indicated.

 It was thought unnecessary to discuss tlie question of jurisdiction where the court affirmed the decision of the Board of Tax Appeals, and In no previous case in wlúeh I sat was the court inclined to reverse the decision of the Board 'upon petition by the Commissioner. - ■

 U. S. v. Klingenberg, U. S. v. Passavant, and U. S. v. Lies, cited in the majority opinion, do not discuss the constitutional question.