Court Opinion

ID: 9636634
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:36:11.058658+00
Date Added: 2024-06-11T18:09:47.583417
License: Public Domain

RE, Chief Judge,
dissenting.
Fully cognizant of the importance of the right to a trial by jury, and the responsibility of the courts in preserving rights enshrined in the Constitution, I am, nevertheless, constrained to dissent. See E.E.O.C. v. Corry Jamestown Corp., 719 F.2d 1219, 1224 (3d Cir.1983). In sum, I disagree that there is a right to a trial by jury, under the seventh amendment to the Constitution, in an action against the United States for the recovery of customs duties.
Little need be said as to the claim that the right to trial by jury in this action is conferred by the Customs Courts Act of 1980, specifically Title 28 U.S.C. § 1876 (1982). Section 1876 is merely an enabling statute necessary because of the plenary jurisdiction acquired by the court, and the penalty cases arising under 28 U.S.C. § 1582 (1982 & Supp. II 1984) in which the United States is a plaintiff. Section 1876, therefore, simply “sets forth the necessary mechanisms for the court to conduct a jury trial.” H.R.Rep. No. 1235, 96th Cong., 2d Sess. 63 (1980), U.S.Code Cong. & Admin. News 1980, pp. 3729, 3775. It neither grants nor confirms any right to a trial by jury in cases against the United States to recover customs duties.
The discussion as to whether there is a right to a jury trial under the seventh amendment to the Constitution appropriately may begin with a reference to the general principle restated by the Supreme Court in the case of Lehman v. Nakshian, 453 U.S. 156, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981). “It has long been settled that the Seventh Amendment right to trial by jury does not apply in actions against the Federal Government.” 453 U.S. at 160,101 S.Ct. at 2701. Hence, when Congress waives the immunity of the United States, a plaintiff has a right to trial by jury only if Congress “has affirmatively and unambiguously granted that right by statute.” Id. at 168, 101 S.Ct. at 2705.
Significantly, unlike an action for the recovery of customs duties, Congress expressly has provided, “affirmatively and unambiguously,” for trial by jury in an action against the United States for the *918recovery of internal revenue taxes. See 28 U.S.C. § 2402 (1982).
Furthermore, as in this action, to enforce a monetary claim against the United States, the Supreme Court indicated, in Galloway v. United States, 319 U.S. 372, 63 S.Ct. 1077, 87 L.Ed. 1458 (1943):
The suit is one to enforce a monetary claim against the United States. It hardly can be maintained that under the common law in 1791 jury trial was a matter of right for persons asserting claims against the sovereign. Whatever force the Amendment has therefore is derived because Congress, in the legislation cited, has made it applicable.
Id. at 388-89, 63 S.Ct. at 1086 (footnotes omitted).
More specifically, in suits against the United States involving the collection of taxes, such as customs duties, the Supreme Court has emphasized that the taxpayer does not have a right to trial by jury under the seventh amendment. For a unanimous Supreme Court in Wickwire v. Reinecke, 275 U.S. 101, 48 S.Ct. 43, 72 L.Ed. 184 (1927), Chief Justice Taft wrote:
It was suggested, in the brief for the United States in resisting the application for certiorari, that the assignment of error made on behalf of the petitioner was inadequate in that it was not based on a reference to the Seventh Amendment to the Constitution requiring a jury trial in a civil case involving more than twenty dollars. This objection has not been renewed in the brief on the merits, doubtless because the right of the petitioner to a jury in such a case is not to be found in the Seventh Amendment to the Constitution but merely arises by implication from the provisions of § 3226, Revised Statutes, which has reference to a suit at law. It is within the undoubted power of Congress to provide any reasonable system for the collection of taxes and the recovery of them when illegal, without a jury trial —if only the injunction against the taking of property without due process of law in the method of collection and protection of the taxpayer is satisfied. Murray’s Lessee v. Hoboken Land and Improvement Co., 18 How. 272, 281, 282, 284 [15 L.Ed. 372]; Nichols v. United States, 7 Wall. 122, 127 [19 L.Ed. 125]; Cheatham v. United States, 92 U.S. [ (2 Otto)] 85, 88, 89 [23 L.Ed. 561].
Id. at 105-06, 48 S.Ct. at 44-45 (emphasis added).
Reliance upon the case of Tull v. United States, — U.S. -, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987) to support the demand for a jury trial in this action against the United States is misplaced. The Tull case was an action brought by the United States to recover potential civil penalties of about $23 million. The case did not arise from the laws enacted by Congress for the collection of taxes, but was brought by the United States seeking civil penalties against an individual for the alleged violation of the Clean Air Act. Tull, 107 S.Ct. at 1833-34. In Tull, the court noted that a civil penalty at common law was recoverable in courts of law, and stated that “[Remedies intended to punish culpable individuals, as opposed to those intended simply to extract compensation or restore the status quo, were issued by courts of law, not courts of equity.” Id. at 1838. Apart from the helpful discussion of the importance of the remedy sought, Tull does not support a claim for a jury trial in a monetary action against the United States to recover customs duties allegedly illegally exacted.
The claimed seventh amendment right to a jury trial in this action apparently is predicated upon the fact that, in the early years of our nation, there existed a common law right of action against a collector of customs, with a concomitant right to a trial by jury, to recover excessive customs duties. Starting in 1839, Congress enacted a series of statutes in which the common law cause of action was eliminated, and various statutory remedies were substituted in its place, culminating, in 1890, with a statutory remedy that had no provision for jury trials.
Accordingly, the question presented is whether the legislation of Congress, which did not provide for trial by jury in actions *919against the United States to recover customs duties alleged to be illegally exacted, is constitutional. In my opinion, that legislation is constitutional and valid.
The early tariff laws provided no statutory system for judicial review of determinations made by the collectors of customs. However, when a collector of customs exacted excessive or illegal duties, by application of common law principles, the collector was personally liable to the importer for the amount illegally exacted.
Although, at that time, the federal courts did not have jurisdiction over those common law actions, it was possible for a collector, sued at common law in a state court, to set up a defense of federal authority, and remove the case into a federal court. See Act of Mar. 3, 1817, ch. 109, 3 Stat. 396.
The determinations of the collectors of customs as to the rate and amount of duties (classification issues) were judicially reviewed on common law principles. See Elliott v. Swartwout, 35 U.S. (10 Pet.) 137, 150, 9 L.Ed. 373 (1836). These common law actions, preferably brought in assumpsit, were the only remedies available to a person who sought to challenge administrative interpretations and applications of the tariff laws.
The personal liability of a collector of customs in an action in assumpsit was based upon the implied promise of the collector to repay the excessive amount collected. Hence, the practice developed that the collectors of customs retained large sums of money to indemnify themselves from any liability for duties paid under protest, and thus did not pay over to the Treasurer of the United States the disputed amounts until the litigation was terminated.
In 1839, Congress passed the first statute regulating disputes involving the classification of imports. See Act of Mar. 3, 1839, ch. 82, § 2, 5 Stat. 339, 348-49. The law required the collectors of customs immediately to place all moneys collected by them to the credit of the Treasurer. That law also made the Secretary of the Treasury the final arbiter for examining and determining claims for refunds of duties paid under protest to the collectors. The 1839 law made no provision for judicial review of the Secretary’s determinations.
In 1845, the Supreme Court, in the case of Cary v. Curtis, 44 U.S. (3 How.) 236, 11 L.Ed. 576 (1845), sustained the constitutionality of the Act of Mar. 3, 1839, and held that, by removing the ground or basis for the collector’s implied promise to repay, Congress took away from the importer the previously existing common law right of action against the collector. 44 U.S. (3 How.) at 251-52, 11 L.Ed. 576. In separate dissents, Justices Story and McLean expressed their views that the law, as interpreted by the majority, was unconstitutional.
Soon after the Cary decision, Congress passed the explanatory Act of Feb. 26, 1845, ch. 22, 5 Stat. 727, “which, by legislative construction of the Act of 1839, restored to the claimant his right of action against the collector____” Arnson v. Murphy, 109 U.S. 238, 241, 3 S.Ct. 184, 186, 27 L.Ed. 920 (1883).
In an 1864 law, Congress continued to allow a right of action against the collector, but conditioned that right upon an appeal from the collector’s determination to the Secretary of the Treasury, and further provided that the action against the collector could not be brought until after the appeal to the Secretary was decided, or not acted upon, within a specified time. See Act of June 30, 1864, ch. 171, §§ 14, 15, 13 Stat. 214-15.
In Arnson v. Murphy, the Supreme Court recognized that the effect of the 1864 Act was to repeal the Act of Feb. 26, 1845, and that the action against the collector of customs, after 1864, was, “converted into an action based entirely on a different principle — that of a statutory liability, instead of an implied promise — which if not originated by the Act of Congress, yet is regulated, as to all its incidents, by express statutory provisions.” Arnson, 109 U.S. at 243, 3 S.Ct. at 188. The Supreme Court stressed that “Congress having undertaken to regulate the whole subject, its legislation is necessarily exclusive.” Id.; see also *920De Lima v. Bidwell, 182 U.S. 1, 178, 21 S.Ct. 743, 746, 45 L.Ed. 1041 (1901).
The statutory right of action against a collector, including the statutory right to trial by jury, continued until 1890. In that year, by the Customs Administrative Act of 1890, ch. 407, 26 Stat. 131, Congress consciously, deliberately, and with full awareness of its constitutional implications, repealed the statute allowing an action against a collector, with its concomitant statutory right to trial by jury before the courts. In 1890, as explained below, Congress substituted a “radically” new statutory system for an action against the United States before a newly established Board of General Appraisers. The new system intentionally removed the right to a jury trial before the courts, and “substituted” a trial before the general appraisers.
The Board of General Appraisers and the new statutory system were intended to provide better administrative control necessary to implement the complete overhaul of the tariff system brought about by the McKinley Tariff Act, ch. 1244, 26 Stat. 567, also enacted in 1890. Congress recognized that the prior system resulted in differing and conflicting tariff law interpretations by courts and juries throughout the country which created undue delay, doubts and difficulties in the collection of the country’s revenues. By the Customs Administrative Act of 1890, after 100 years of experience with other methods, Congress removed from the ordinary courts litigation over tariff law interpretation. To achieve uniformity, Congress expanded the power of the general appraisers to decide the technical problems inherent in the classification and valuation of imported merchandise. See generally F. Frankfurter & J. Landis, The Business of the Supreme Court 149 (1928).
The statutory antecedents and applicable Supreme Court decisions, including Cary v. Curtis, were, of course, well known to the Congress in the deliberations and debates which led to the enactment of the 1890 law.
This Congressional awareness is made clear by the following excerpt from the Report of the House Committee on Ways and Means, which quoted the Senate Committee Report:
It will be seen that the proposed sections are a radical departure from the existing law. They substitute for the decision of the Secretary of the Treasury, in all cases of appeal upon questions of classification and rate of duty and upon questions as to fees, charges, and exactions, the decision of the board of appraisers provided for in the preceding section, and confer upon said board in the first instance exclusive jurisdiction of all said questions. They confer upon the several circuit courts of the United States appellate jurisdiction upon all questions of law as respects classification and rate of duty, with a final determination by the Supreme Court of the United States in difficult cases, or in cases where the Attorney-General shall be of opinion that the matter in controversy should be appealed thereto.
Previous to 1839 a person paying duties claimed by him to have been illegally exacted had a common-law right of action against the collector to whom the payment had been made, provided the person making such payment gave notice at the time of payment that the duties charged were too high, and that the party paying so paid in order to secure possession of his merchandise, and that he intended to sue to recover back the amount so erroneously paid, and provided that he also gave notice to the collector not to pay over the amount into the Treasury. Collectors of customs being thus personally liable, it was their practice to retain large sums of money in their possession on the ground that it had been paid under protest, and that they must indemnify themselves against liability. This evil of retention of moneys by collectors became so marked that by the second section of the act of March, 1839, all moneys were required to be paid into the Treasury.
It was held by the Supreme Court in the case of Carey [sic] vs¡ Curtis (3 Howard, page 236) that this act de*921prived the importer of all right of action in the courts for duty erroneously or illegally exacted from him. This decision of the court, therefore, left him no remedy but an appeal to the Secretary of the Treasury, who was authorized, whenever it was shown to his satisfaction in any case of unascertained duties, etc., to refund such overpayment. It thus being held that the importer was excluded by this act from commencing suit at common law, Congress, on the 26th of February, 1845 (vol. 5, Stat. at Large, page 727), provided that nothing in the act should be construed to take away or impair the right of any person or persons to maintain a suit at common law.

And this provision continued in force until June 30, 1864, when the sections, 2931 and 2932, were enacted, since which time importers have been compelled to resort to the statutory remedy therein provided, and by said sections the common law remedy which existed up to that time was taken away

It is believed that the proposed sections will afford claimants a speedy, just, and efficacious remedy. The tribunal in the first instance will be composed of officers selected with a view to their peculiar fitness and qualifications for the duties devolving upon them. Their time and attention will be given exclusively to a study of the tariff laws and to their practical application, and they could readily hear and dispose of the cases as they might arise in an intelligent and satisfactory manner; but if they shall make a mistake as respects the true construction of the statutes relating to classification and rate of duty, a speedy and efficacious remedy is provided for a review of their decisions as respects the law of the case, their finding of facts being conclusive upon the Government and the importer.
H.R.Rep. No. 6, 51st Cong., 1st Sess. 7-8 (1980) (emphasis added).
One of the principal features of the 1890 legislation, as proposed by its leading congressional sponsor, Congressman (later President) William McKinley, then Chairman of the House Committee on Ways and Means, was the provision for the appointment of a board of nine general appraisers, before whom trials would be conducted.
When the House convened as a Committee of the Whole to consider the bill, there was vigorous opposition to the McKinley proposal, much of which focused upon the fact that the new system would take away from the importer, in a classification case, the right to a trial by jury against a collector of customs. 21 Cong. Rec. 825 (1890). Although acknowledging that the right of trial by jury as to questions of fact would be taken away, the proponents explained that “there is a substitute for the jury in the nine appraisers____” Id.
During the debate in the House, the focus shifted to the Act of Mar. 3,1839, Cary v. Curtis, and the explanatory Act of Feb. 26,1845. The proponents, relying upon the Supreme Court opinion in Cary, maintained that the proposed new system was not constitutionally defective in that:
Congress, [as] the legislative branch of the Government, was supreme in its power of levying and collecting taxes, and that if they allowed a suit in any case it was only an act of clemency and beneficence on the part of the Government; that they need not allow any claim for redress, but they might make the Secretary of the Treasury the supreme tribunal in the case, both as to the law and as to the facts, and take away entirely the right of trial by jury.
Id. at 818-19 (emphasis added).
After three days of extensive consideration by the House, Chairman McKinley summarized the position of the proponents as it pertained to the right to trial by jury:
Mr. McKINLEY. Mr. Chairman, I had intended to cite some authorities on the constitutional question raised on the fifteenth section; but I understand from the discussion this morning that that position has been abandoned and that no gentlemen now seriously questions the constitutional right of Congress to enact the legislation proposed in the bill *922under consideration. The question, therefore, has rather drifted to one of public policy — whether it is fair, just, and necessary to create a board of general appraisers, with the powers granted in the section under debate, and to deprive, as it is said, the importer of the right of trial by jury.
Id. at 833 (emphasis added).
Congress, in the 1890 law, specifically-repealed section 3011 of the Revised Statutes of the United States (1878), which authorized trial by jury, in actions against a collector of customs. See Customs Administrative Act of 1890, ch. 407, § 29, 26 Stat. 131, 141-42. Furthermore, Congress relieved the collectors of any personal liability resulting from a determination as to the classification or rate of duty of imported merchandise. See Customs Administrative Act of 1890, ch. 407, § 25, 26 Stat. 131, 141; see also H.R.Rep. No. 6, 51st Cong., 1st Sess. 10.
In repealing section 3011 of the Revised Statutes, Congress removed the jurisdiction from the federal courts, to hear suits against the collectors, and conferred jurisdiction upon the Board of General Appraisers to review determinations of the collectors, with a further review in the circuit courts. See Glidden Co. v. Zdanok, 370 U.S. 530, 575, 82 S.Ct. 1459, 1485-86, 8 L.Ed.2d 671 (1962).
The legislative history of the Customs Administrative Act of 1890 leads me to the inescapable conclusion that the Congress carefully considered the question of the importer’s right to a jury trial in an action for the refund of customs duties, and that it examined fully and completely the constitutional and policy arguments against eliminating that right. It is beyond doubt that Congress concluded that there was no constitutional bar to removing the right to trial by jury. In clear and unambiguous terms, Congress intentionally and deliberately chose to eliminate jury trials in actions against the United States to recover excessive or illegal customs duties.
The Customs Administrative Act of 1890 was interpreted and applied by the Supreme Court in the case of Schoenfeld v. Hendricks, 152 U.S. 691, 14 S.Ct. 754, 38 L.Ed. 601 (1894). The Supreme Court held that after the 1890 law no action could be maintained against a collector of customs either at common law or under the statutes of the United States, since the remedy given by the 1890 statute through the Board of General Appraisers was exclusive. Shoenfeld, 152 U.S. at 692-93, 14 S.Ct. at 755. Also, it was clear to the Supreme Court, in United States v. Ranlett & Stone, 172 U.S. 133, 19 S.Ct. 114, 43 L.Ed. 393 (1898) that: “[t]he remedies provided by the Act of June 10, 1890, furnish the equivalent for the action against the collector which was originally the remedy for an illegal exaction of duties____” 172 U.S. at 145-46, 19 S.Ct. at 118.
It is not necessary here to trace the subsequent statutory evolution of the Board of General Appraisers to today’s Article III United States Court of International Trade. See Re, Litigation Before the United States Court of International Trade, 19 U.S.C.A. §§ 1 to 1300 (West Supp. 1988). Nevertheless, it is important to note that this court possesses “all the powers in law and equity of, or as conferred by statute upon, a district court of the United States,” 28 U.S.C. § 1585 (1982); and, the court will make its determination in this action de novo, “upon the basis of the record made before the court,” 28 U.S. C. § 2640 (1982).
It is crystal clear, therefore, that Congress removed one form of statutory remedy and substituted another with procedures which today fully meet the requirements of due process. The fact that the existing remedy does not include, and has not included since 1890, a provision for trial by jury, does not render the existing remedy and its procedures unconstitutional.
Of course, this action does not present a claim that Congress has withdrawn from any judicial review a cause of action which was the subject of a suit at common law. There is a vast difference between the total denial of any remedy, and the substitution of another statutory remedy for one that previously existed. As Professor Hart con-*923eluded: “It must be plain that Congress necessarily has a wide choice in the selection of remedies, and that a complaint about action of this kind can rarely be of constitutional dimension.” See, Hart, The Power of Congress to Limit the Jurisdiction of Federal Courts: An Exercise in Dialetic, 66 Harv.L.Rev. 1362, 1366 (1953). Furthermore, the power of Congress to regulate the jurisdiction of the federal courts, and to determine the remedies they may afford, has long been recognized by the Supreme Court. See Ex parte McCardle, 74 U.S. (7 Wall.) 506, 513, 19 L.Ed. 264 (1869).
On this question, the Supreme Court’s opinion in Anniston Mfg. Co. v. Davis, 301 U.S. 337, 57 S.Ct. 816, 81 L.Ed. 1143 (1937) is particularly instructive. In that case, plaintiff alleged the unconstitutionality of a statute which took away a statutory right of action against the collector of internal revenue and substituted a different statutory action directly against the United States. Anniston, 301 U.S. at 341-42, 57 S.Ct. at 818. The Supreme Court agreed with the government’s statement that the Court was not presented with the question of “ ‘the power of Congress to withdraw suit entirely, both against the Collector and against the Government____’” Id. at 342, 57 S.Ct. at 818. In upholding the constitutionality of the new statutory remedy, Chief Justice Hughes wrote:
The Government has not denied its obligation to refund the amounts found in the authorized proceeding to be recoverable, but has recognized that obligation. In such a case, the substitution of an exclusive remedy directly against the Government is not an invasion of constitutional right. Nor does the requirement of recourse to administrative procedure establish invalidity if legal rights are still suitably protected. The immediate question is whether the authorized proceeding affords a fair and adequate remedy. We accordingly inquire whether the prescribed procedure gives an opportunity for a full and fair hearing and determination of all questions of fact and adequately provides for the protection of the legal rights of the claimant, embracing whatever right of refund the claimant is entitled to assert under the Federal Constitution.
Id. at 343, 57 S.Ct. at 819 (emphasis added).
The teaching of Anniston applies perforce to this case. Congress has not denied any obligation by the Government to refund excessive or illegally exacted customs duties. Instead, Congress established an exclusive and effective remedy against the United States, in place of a previous common law, and later statutory, right of action against the collectors of customs. Accordingly, the question here, as in Anniston, is not the power of Congress to remove a cause of action entirely, but rather “whether the authorized proceeding affords a fair and adequate remedy.” See id. As in Anniston, in this case, the existing procedures, established by Congress, before this court provide a claimant against the United States with “an opportunity for a full and fair hearing and determination” of all questions of fact and issues of law. In these suits against the United States, Congress has authorized a statutory remedy which is more effective and complete than any which existed at common law.
To conclude that the plaintiff in this action against the United States is entitled to a jury trial under the seventh amendment, this court must hold that the Customs Administrative Act of 1890 was unconstitutional solely because Congress did not provide for trial by jury. The court would have to conclude that the Supreme Court was wrong in Cary, and that the Act of Mar. 3, 1839 was unconstitutional. The court would also have to question the constitutionality of the Customs Courts Act of 1970, and the Customs Courts Act of 1980, neither of which provided for trial by jury in these actions. For the reasons stated, I am not persuaded that those determinations should be made.
Since I am of the opinion that plaintiff, in this action against the United States, does not have a right to a jury trial under the *924seventh amendment, or applicable statutes, I would grant the defendant's motion to strike plaintiffs demand for a jury trial.
Pursuant to 28 U.S.C. § 1292(d)(1) (1982), since I believe that a controlling question of law is involved, with respect to which there is substantial ground for difference of opinion, and that an immediate appeal from this order may materially advance the ultimate termination of this litigation, I would also certify the question for immediate appeal to the United States Court of Appeals for the Federal Circuit.