Horne v. Federal Reserve Bank of Minneapolis, 17683.

• Decision Date: 29 April 1965
• Docket Number: No. 17683.,17683.
• Citation: 344 F.2d 725
• Parties: W. Frank HORNE, Leo Zurn, Joan Van Poperin, William McNeely, P. A. Del Valle, John Doe and Richard Roe, Appellants, v. FEDERAL RESERVE BANK OF MINNEAPOLIS, First National Bank of St. Paul and Commercial State Bank, St. Paul, Northwestern National Bank, Minneapolis, Lyndon B. Johnson, President, United States, Douglas Dillon, Secretary, U. S. Treasury, and United States of America, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

344 F.2d 725 (1965)

W. Frank HORNE, Leo Zurn, Joan Van Poperin, William McNeely, P. A. Del Valle, John Doe and Richard Roe, Appellants, v. FEDERAL RESERVE BANK OF MINNEAPOLIS, First National Bank of St. Paul and Commercial State Bank, St. Paul, Northwestern National Bank, Minneapolis, Lyndon B. Johnson, President, United States, Douglas Dillon, Secretary, U. S. Treasury, and United States of America, Appellees.

No. 17683.

United States Court of Appeals Eighth Circuit.

April 29, 1965.

Alan S. Rosenthal, Attorney, Dept. of Justice, Washington, D. C., made argument for appellees, United States and other United States Officers, and filed brief with John W. Douglas, Asst. Atty. Gen., Miles W. Lord, U. S. Atty., Minneapolis, Minn., Richard S. Salzman, Atty., Dept. of Justice, Washington, D. C., and Roland Graham, Atty., Federal Reserve Bank of Minneapolis, Minneapolis, Minn.

Albert D. Levin, St. Paul Minn., made argument for Commercial State Bank in St. Paul and filed brief. James A. Halls, of Faegre & Benson, Minneapolis, Minn., made argument for Northwestern Nat. Bank of Minneapolis and First Nat. Bank of St. Paul, appellees. On the brief were: James A. Halls and Lawrence C. Brown, of Faegre & Benson, Minneapolis, Minn., Frank Hammond and Richard H. Kyle, of Briggs & Morgan, St. Paul, Minn., Attorneys for First Nat. Bank of St. Paul.

Before VOGEL, MATTHES and RIDGE, Circuit Judges.

RIDGE, Circuit Judge.

Summary judgment was granted in this case on the basis that plaintiffs-appellants "* * * (did) not have the right and requisite standing to bring this action." The complaint filed by them in the court below alleged they are "residents, freeholders, voters, citizens and taxpayers of the United States" and bring this suit against appellees "* * on behalf of, in the interest of, and representing the people of the United States to enforce the primary right of the people of the United States to have the Constitution of the United States followed by their Government." Primarily, they alleged in their complaint the unconstitutionality of the National Bank Act of 1864, 12 U.S.C. § 21 et seq., and the Federal Reserve Act of 1913, 12 U.S.C. § 221 et seq.; and assert that the Federal Reserve Banks, as agencies of the United States, organized under those Acts of Congress, are not constitutionally established and, therefore, are without legal existence.

The gravamen of their complaint is that the Federal Reserve Banks, by issuing Federal Reserve Notes, are coining money in violation of the Constitution of the United States, Art. 1, Sec. 8, and that the Act, supra, purportedly authorizing such banks to do so is an unconstitutional delegation of legislative authority. They assert that all of the appellee banks "create" credit by making bookkeeping entries (which they say is an unlawful coining of money), and that they use this self-created credit to purchase U. S. Treasury securities, which are turned over to the banks without any consideration therefor and thus are worthless and void. The result of this, they claim, is that the taxpayers of the United States are greatly indebted to the banks for a debt in the neighborhood of 1500 billion dollars, and that the tax monies paid by all taxpayers to pay the principal and interest on these void securities is constitutionally wrong.

Individual actions are also asserted in the complaint by appellants Zurn and Van Poperin, each of whom claims to have presented Canadian currency to the Northwestern National Bank of Minneapolis; Zurn, 363, and Van Poperin, 287 Canadian dollars, and received in return $4.87 and $4.76 respectively in lawful money of the United States. Each of them claimed actual damages and $250,000.00 punitive damages, plus the value of their Canadian currency. Additional relief requested was: (1) that the National Bank Act and the Federal Reserve Act, both supra, be declared unconstitutional; (2) that the Government securities in the hands of the banks be declared void; (3) that the coining of money (asserted to constitute a nuisance) maintained by such banks be enjoined; (4) that the President, and the Secretary of the Treasury be enjoined from using any Government money to pay the principal and interest on these allegedly void securities; and (5) that the banks also be enjoined from making bookkeeping entries and further circulating private notes as money. As noted above, the District Court held that these appellants lacked standing to bring the instant suit and granted summary judgment in favor of appellees.

Casting aside the phantasmagoria of philosophical and political beliefs appellants assert, they claim standing as "individual citizens and taxpayers" to represent "the people of the United States" in this case to challenge the constitutionality of the two Acts of Congress, supra; and seek to restrain Government agencies, creatures of those Acts, from furter acting thereunder; and to have the federal courts restrain the Executive Branch of the Government from expending monies in further implementation of those Acts. Standing to so proceed is claimed as a result of the injury occurring to taxpayers generally from the use of tax funds for unconstitutional purposes, as well as the generalized, unspecific injury resulting to all citizens of the United States who have a right to a constitutional form of Government, based on the unctious political philosophy espoused by appellants. Thus, it is apparent that the primary determination appellants here seek is attempted to be related to the two statutes, supra, and all other questions presented by them depend on the determination made in respect to that matter.

Appellants' generalized complaints concerning current political philosophy in these United States, of course, are not before us. They must take that matter to some other forum. The Courts of the United States are without power to deal with any such questions. This Court, as all other Courts, has always rejected advocacy calculated to distract the Court's attention from the real and substantial questions involved in litigation because we are reminded by what Mr. Justice Holmes said, in Davis v. Mills, 194 U.S. 451, at 457, 24 S.Ct. 692, at 695, 48 L.Ed. 1067 (1904): "Constitutions (and laws) are intended to preserve practical and substantial rights, not to maintain theories." (Par. added.)

It has long been settled that federal courts have no power per se to review and pass upon the constitutionality of Acts of Congress. As early as Marbury v. Madison, 5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803), it was declared that we may only entertain matters which fall within the "case or controversy" limitation of judicial power as granted in Art. III, Sec. 2, of the Constitution of the United States. Following this reasoning it was early determined that a bare assertion questioning the constitutionality of an Act of Congress does not present the requisite of a "case or controversy" to any court. See, for example, Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246 (1911); Fairchild v. Hughes, 258 U.S. 126, 42 S.Ct. 274, 66 L.Ed. 499 (1922). The oft-quoted case of Commonwealth of Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923), which held that the interest of a federal taxpayer in the expenditure of tax funds was insufficient to give him standing to question the expenditure thereof, states the law in this regard quite succinctly:

"We have no power per se to review and annul acts of Congress on the ground that they are unconstitutional. * * * The party who invokes the power (negative power to disregard unconstitutional enactments) must be able to show, not only that the statute is invalid, but that he has sustained or is immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally." (Par. added.) 262 U.S. 488, 43 S.Ct. 601.

Hence a party who has not suffered a direct injury is said to lack standing to bring a civil action; that is, he does not have a "case or controversy" calling for relief by the courts. This concept has never been doubted; it has gained strength through the years as a necessary bulwark against encroachment on the apportionment of power as made by our Constitution. (cf.) Doremus v. Board of Education, etc., 342 U.S. 429, 72 S.Ct. 394, 96 L.Ed. 475 (1952); Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940); Tennessee Electric Power Co. v. T. V. A., 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939); Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374 (1938). We have heretofore stated our agreement with the above: "No one may challenge the constitutionality of a statute unless, and until, and except in the respect that, he is directly and adversely affected thereby." Allbaugh v. United States, 184 F.2d 109, 115 (8 Cir., 1950).

As to the nature of "direct injury" as used in the above-cited cases, the Supreme Court, in Alabama Power Co. v. Ickes, supra, explained, "The term `direct injury' is there (referring to Commonwealth of...