Texas Ass'n of Concerned Taxpayers, Inc. v. U.S., 84-5021

• Decision Date: 30 September 1985
• Docket Number: No. 84-5021,84-5021
• Citation: 772 F.2d 163
• Parties: -5960, 85-2 USTC P 16,441 TEXAS ASSOCIATION OF CONCERNED TAXPAYERS, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 163

772 F.2d 163

56 A.F.T.R.2d 85-5960, 85-2 USTC P 16,441

TEXAS ASSOCIATION OF CONCERNED TAXPAYERS, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 84-5021.

United States Court of Appeals Fifth Circuit.

Sept. 30, 1985.

Sam Kazman, Ronald A. Zumbrun, Washington, D.C., for plaintiff-appellant.

Glenn L. Archer, Jr., Asst. Atty. Gen., Tax Div., U.S. Dept. of Justice, Michael L. Paup, Chief, Appellate Sec., Richard Farber and Michael J. Roach, Washington, D.C., for defendant-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before REAVLEY and JOLLY, Circuit Judges, and SANDERS, ^* District Judge.

SANDERS, District Judge:

Texas Association of Concerned Taxpayers, Inc. (TACT) appeals the district court's judgment dismissing its action under rule 12(b)(6), Fed.R.Civ.P. We affirm.

I.

TACT commenced this suit under 26 U.S.C. Sec. 7422 for the refund of $3.11 of federal excise tax paid on its telephone bills. This sum is attributable to the enactment of Section 282(a) of the Tax Equity and Fiscal Responsibility Act of 1982, Pub.L. No. 97-248, 96 Stat. 324 (TEFRA). TACT contends that the passage of TEFRA violated the origination clause contained in article I, section 7, clause 1 of the United States Constitution.

The origination clause states:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

On December 5, 1981, the House of Representatives passed a bill entitled the Miscellaneous Revenue Act of 1981, H.R. 4961. As the bill number indicates, this bill had originated in the House. In the form passed by the House, H.R. 4961 was intended to reduce taxes. The total revenue effect of the tax provisions were projected to be a reduction of revenues ranging from $69 million in fiscal year 1982 to $301 million in fiscal year 1986. H.R.Rep. No. 404, 97th Cong., 1st Sess. at 38. Complaint p 15.

Upon reaching the Senate, H.R. 4961 was referred to the Senate Finance Committee, which struck the entire text of the bill after the enacting clause and replaced it with a massive tax-increasing proposal. Instead of reducing the amount of revenue collected, the bill as amended proposed to increase tax revenues by over $92 billion in fiscal years 1983-85, and by over $218 billion through fiscal year 1987. The bill passed by the Senate on July 23, 1982, was largely unchanged from that reported out of the Committee. Complaint p 16.

Upon the bill's return to the House, Representative Rousselot offered a resolution to the House which proposed to resolve that the Senate's amendments to H.R. 4961 contravened the origination clause. The Chairman of the House Ways and Means Committee moved to table the resolution. The motion to table carried the House. The Chairman, at the direction of the Committee, then moved to send H.R. 4961 to conference with the Senate, without first referring it back to the House Committee on Ways and Means. The House agreed to that motion after considerable constitutional debate, and the bill was sent to conference. Complaint p 17; Moore v. U.S. House of Representatives, 733 F.2d 946, 949 (D.C.Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 779, 83 L.Ed.2d 775 (1985).

On August 17, 1982, the conference committee reported its version of H.R. 4961, which closely resembled the Senate-passed bill. The conference bill would increase tax revenues by $91.5 billion in fiscal years 1983-85 and by over $205 billion in fiscal years 1983-87. Complaint p 19. On August 19, 1982, the House and the Senate each passed the bill and H.R. 4961 was signed into law by the President on September 3, 1982. Complaint p 20.

TACT does not claim that the bill that became TEFRA did not originate in the House of Representatives. Rather, it contends that upon its origination it was not a bill for "raising revenue" within the meaning of the origination clause because the net effect of the bill would have been to reduce the amount of revenue collected. Thus, it is argued, when the Senate amended H.R. 4961 so that the net effect of the bill's provisions was to increase the revenue yield, the bill became one for raising revenue for the first time and it originated improperly in the Senate.

TACT also asserts that if H.R. 4961 in its original form is a revenue-raising measure, the Senate's amendments are unlawful as exceeding the scope of the Senate's power to amend with respect to any type of bill.

II.

TACT's primary claim turns on whether the phrase in the origination clause referring to "bills for raising revenue" means bills that increase revenue or whether it refers to all bills relating to revenue--revenue-increasing or revenue-decreasing--in which case TEFRA constitutionally originated in the House. We are of the opinion that this issue poses a nonjusticiable controversy.

The doctrine of nonjusticiability based on the presence of a political question is part and parcel of the separation of powers and is concerned with whether an issue is appropriate for judicial determination. Metzenbaum v. FERC, 675 F.2d 1282 (D.C.Cir.1982). A question is properly deemed political when resolution is committed by the Constitution to a branch of the federal government other than the judiciary. Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976).

The Supreme Court in Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962), observed that each of the varying formulations which may be used to describe a nonjusticiable political question "has one or more elements which identify [the question] as essentially a function of separation of powers." The Court then listed the elements found in previous cases:

... Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

369 U.S. at 217, 82 S.Ct. at 710; See also INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 2779, 77 L.Ed.2d 317 (1983). ¹

Every challenge to the constitutionality of a statute is not transformed into a political question because the claim is one against Congress' authority to enact the law. Chadha, 103 S.Ct. at 2779. The judicial branch is, of course, the final arbiter of the constitutionality of a statute. Marbury v. Madison, 1 Cranch (5 U.S.) 137, 2 L.Ed. 60 (1803).

This case differs from Chadha, where the Supreme Court held that review of the "legislative veto" scheme was not barred by the political question doctrine. In Chadha, the Court was faced with a situation in which the House purported to exercise full legislative authority with no provision for passage by the Senate and presentation to the President. After examining the "explicit, unambiguous" constitutional exceptions that authorized unilateral House action, the Court concluded that the House was without a permissible basis of authority for its action. 103 S.Ct. at 2786-87. See also Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969) (review is proper when House action is without constitutional basis of authority). By contrast, the manner of TEFRA's passage is not an issue of sheer lack of authority bounded by "explicit, unambiguous" cornerstones, but rather one of the permissible interpretations of language by which Congress is to guide the allocation of its essential legislative responsibilities.

"Raising revenue" certainly is an ambiguous term. TACT vehemently contends that history dictates an interpretation equating it with "increasing revenue," see also Bertelsen v. White, 65 F.2d 719, 722 (1st Cir.1933) ("It is not a bill to raise revenue.... On the contrary, it diminishes the revenue of the government."), but all contemporary courts have adopted the construction apparently given it by Congress, i.e. "relating to revenue." See, e.g., Armstrong v. United States, 759 F.2d 1378, 1381-82 (9th Cir.1985); Wardell v. United States, 757 F.2d 203, 205 (8th Cir.1985).

There are no judicially discoverable standards of resolution different or superior to those employed by Congress. Indeed, the Ninth Circuit was propelled to its decision by the precedents and debates of the Congress itself. 759 F.2d at 1381. It would be difficult to formulate any standard of constitutionality to adequately guide Congress down the chutes and rapids that it must continually face in dealing with this clause. The fluctuations in national income and corresponding shifts in revenue yields make any label of "increasing revenue" a slippery and potentially chameleonic one. The same bill may have an effect of increasing revenue under certain economic conditions and decreasing revenue under others. See Twin City Bank v. Nebeker, 167 U.S. 196, 202, 17 S.Ct. 766, 769, 42 L.Ed. 134 (1897) ("What bills belong to that class [of bills for raising revenue] is a question of such great magnitude and importance that it is the part of wisdom not to attempt, by any general statement, to cover every possible phase of the subject."); Dyer v. Blair, 390 F.Supp. 1291, 1302, n. 26 (N.D.Ill.1975) (three-judge court).

Judicial second-guessing of the meaning of the origination clause would also inherently express a "lack of the respect due [a] coordinate [branch] of government." Baker, 369 U.S. at 217, 82 S.Ct. at 710. The House is certainly aware of its constitutional prerogatives and spent considerable...