Sunshine Anthracite Coal Co. v. Adkins

• Decision Date: 08 January 1940
• Docket Number: No. 2949.,2949.
• Citation: 31 F. Supp. 125
• Parties: SUNSHINE ANTHRACITE COAL CO. v. ADKINS, Collector of Internal Revenue.
• Court: U.S. District Court — Eastern District of Arkansas

31 F. Supp. 125

SUNSHINE ANTHRACITE COAL CO. v. ADKINS, Collector of Internal Revenue.

No. 2949.

District Court, E. D. Arkansas, W. D.

January 8, 1940.

Adamson, Blair & Adamson, of Terre Haute, Ind., and G. O. Patterson, of Clarksville, Ark., for plaintiff.

Sam Rorex, U. S. Atty., and Leon B. Catlett, Asst. U. S. Attorney, both of Little Rock, Ark., and Robert Sher and Harold Leventhal, Asst. Attys. Gen., for defendant.

Harper & Harper, of Fort Smith, Ark., for District 14 of National Bituminous Coal Commission.

Before WOODROUGH, Circuit Judge, and TRIMBLE and LEMLEY, District Judges.

WOODROUGH, Circuit Judge.

This case has been submitted to the three-judge court on the motion of the plaintiff to strike out those parts of the defendant's answer and supplemental answer which set forth the proceedings of the National Bituminous Coal Commission in which it was determined by the Commission that the underlying coal in certain counties of Arkansas, including the coal produced by the plaintiff, is bituminous coal within the meaning of the Bituminous Coal Act of April 26, 1937, 15 U.S.C.A. § 828 et seq., and that the plaintiff is not entitled to exemption from the operation and effect of the Act and the subsequent proceedings on the appeal from such determination to this court, reported in Sunshine Anthracite Coal Co. v. National Bituminous Coal Commission, 8 Cir., 105 F.2d 559, and the application for and denial of certiorari by the Supreme Court November 6, 1939. Sunshine Anthracite Coal Co. v. Ickes, 60 S.Ct. 142, 84 L.Ed. ___. The plaintiff's petition has been amended so as to include expanded allegations to the effect that the coal produced by it is not bituminous coal within the meaning of Section 17 (b) of the Act, and in support of its motion it presents that it is entitled in this suit to have this court consider its evidence in support of these allegations and render its own judgment upon the issue joined thereon. Its position is that this court is not finally bound by the determination of the Commission or the decision of the Court of Appeals on the review in that court to find as a fact that plaintiff's coal is bituminous coal within the meaning of the Act.

This suit is in equity against the Collector of Internal Revenue to enjoin him from collecting from the plaintiff the "tax" of 19½ per cent upon gross sales of its coal production, imposed by Section 3 of the Act against producers of bituminous coal moving in interstate commerce who do not become members of the Code. The suit is independent of the proceedings before the Commission and the appeal in the Circuit Court of Appeals, and it is an appropriate suit to test the validity as to the plaintiff of the imposition upon it of the "tax" of 19½ per cent upon its gross sales of coal. In considering and passing upon the present motion therefor this court will confine itself entirely to the question whether or not the status of the plaintiff as a producer of bituminous coal within the definition of Section 17 of the Act has been finally settled against the plaintiff by the determination and decisions pleaded by defendant.

This court's jurisdiction is that of a District Court and it is bound to follow unreversed and unmodified decision by the Circuit Court of Appeals of the circuit. When we turn to that court's opinion in Sunshine Anthracite Coal Company v. National Bituminous Coal Commission, supra, we note the court's conclusion was that Congress had delegated to the Commission the jurisdiction to determine for all administrative purposes of the Act, what coals were and what coals were not within the definitions and purview of the Act. The issue of the Commission's jurisdiction was squarely presented by the petitioner for review which is the party plaintiff in this case, and was directly passed on and decided by the court. It was contended 105 F.2d 562 "that the jurisdiction of the National Bituminous Coal Commission in fixing maximum and minimum prices, rules and regulations, is limited by the Act to coal producers who have accepted the code, and that as petitioner has not become a code member the Commission is given no power to hold a hearing and determine the class or kind of coal produced from petitioner's mines." It argues that "whether or not the coal it produces is bituminous, anthracite, semi-anthracite, lignitic or what not, is of no interest to the Commission until such time as the producer applies for membership in the Code."

In answer to that contention "the Commission has rested its jurisdiction to determine whether petitioner's coal is bituminous within the meaning of the Act upon two separate and distinct bases: (1) Upon the general power of the Commission to make all reasonable rules and regulations for carrying out the provisions of the Act and (2) upon the power to grant exemptions under Section 4-A."

The Court of Appeals decided the issue and said: "We think the grounds of jurisdiction relied upon by the Commission are fully sustained." Further on in the opinion, the court said: "Here, where a determination of the character of coals in different parts of the country was a necessary incident to the performance of its other functions, the Commission was authorized to make the necessary determination." This court is bound to follow and apply the law so stated by the Circuit Court of Appeals.

But it is contended for the plaintiff, in support of the present motion, that its petition for review in the Circuit Court of Appeals was in an administrative proceeding in which such fact findings of the administrative body as were based upon substantial evidence were declared by the statute to be conclusive upon the court. The question whether plaintiff's coals are or are not bituminous is a question of fact and plaintiff asserts a right to the independent judgment of the court as to the fact.

The answer to the contention is that the Bituminous Coal Act, in conferring powers upon the Coal Commission and prescribing the duties to be performed by it, has made the discharge of many of the Commission's duties dependent upon its first making determination of the character of the underlying coals throughout the country and of the resultant status of those who produce the coals and engage in interstate commerce therein. The determination of the character of the coals could have been made by the Congress itself, or it could delegate the power. By the terms of the Act it conferred jurisdiction on the Commission to make the determination and the procedure provided for and followed by the Commission accorded to the plaintiff a full and fair hearing and a review in the Circuit Court of Appeals which satisfied all constitutional requirements as to determination of the fact question of the plaintiff's status in respect to the administration of the Act. The nature of the fact question as it would arise in many different parts of the country practically necessitated delegation of the power to make determination to some such national body as the Coal Commission and precluded committing it to the outcome of individual law suits in many courts.

It has not been decided whether the Collector may constitutionally enforce the collection of the "tax" of 19½ per cent against the plaintiff as provided in Section 3 of the Act, but the decision of the Court of Appeals that the Commission had jurisdiction to determine, and that it had rightly determined the status of the plaintiff as a producer of bituminous coal, necessarily implied that the determination was final and conclusive in the present suit. The decision of the Supreme Court in Shields v. Utah Idaho C. R. Co., 305 U.S. 177, 59 S.Ct. 160, 164, 83 L.Ed. 111, permits of no other conclusion by this court.

In that case, the Utah Central Railroad Company sought to enjoin the United States District Attorney and the United States from enforcing against it certain penal statutes which were not applicable to interurban electric railways. The railroad company claimed to be exempt from the operation of the statutes on the ground that it was an interurban electric railway, but in proceedings had before the Interstate Commerce Commission to which it was a party, the Commission determined that it was not. There had been no court review of the Commission's determination and the railroad company contended that it was entitled to the independent judgment of the court on the fact issue. The Circuit Court of Appeals in the Tenth Circuit, 95 F.2d 911, held that it was so entitled, but on appeal the Supreme Court said:

"What is the scope of the judicial review to which respondent is entitled? As Congress had constitutional authority to enact the requirements of the Railway Labor Act looking to the settlement of industrial disputes between carriers engaged in interstate commerce and their employees, and could include or except interurban carriers as it saw fit, no constitutional question is presented calling for the application of our decisions with respect to a trial de novo so far as the character of the respondent is concerned. With respect to that question, unlike the case presented in United States v. Idaho, 298 U.S. 105, 56 S.Ct. 690, 80 L.Ed. 1070, where the Interstate Commerce...