Cotonificio Bustese, SA v. Morgenthau, 7682.

• Decision Date: 28 April 1941
• Docket Number: No. 7682.,7682.
• Parties: COTONIFICIO BUSTESE, S. A. v. MORGENTHAU, Secretary of the Treasury, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

74 App. DC 13, 121 F.2d 884 (1941)

COTONIFICIO BUSTESE, S. A. v. MORGENTHAU, Secretary of the Treasury, et al.

No. 7682.

United States Court of Appeals for the District of Columbia.

Decided April 28, 1941.

Dean Hill Stanley, of Washington, D. C., and Thomas M. Lane, of New York City, for appellant.

Edward M. Curran, U. S. Atty., and John L. Laskey, Asst. U. S. Atty., both of Washington, D. C., for appellee.

Before GRONER, Chief Justice, and VINSON, and RUTLEDGE, Associate Justices.

RUTLEDGE, Associate Justice.

Appellant sought below an order directing the Secretary of the Treasury to reconsider a petition for remission or mitigation of a customs exaction, alleged to be a "penalty" within the meaning of 19 U.S. C.A. § 1618. The Secretary had held that the exaction was a "duty," not a "penalty," and therefore that he had no authority under the statute to remit or mitigate it. Accordingly, he refused to consider or determine whether the circumstances stated in the petition would justify relief if a penalty were involved. The District Court sustained the Secretary's position and dismissed the complaint.

The Tariff Act of 1930 requires imported articles or their containers to be marked so as to indicate the country of origin. 19 U.S.C.A. § 1304 (a). Section 1304 (b), entitled "Additional duties for failure to mark," provides: "If at the time of importation any article or its container is not marked, stamped, branded, or labeled in accordance with the requirements of this section, there shall be levied, collected, and paid on such article, unless exported under customs supervision, a duty of 10 per centum of the value of such article, in addition to any other duty imposed by law, or, if such article is free of duty, there shall be levied, collected, and paid a duty of 10 per centum of the value thereof."

In 1935 and 1936, appellant, an Italian corporation, imported Italian raw silk valued at $691,068 and entered it at the New York customs house. Because the country of origin was not marked on the containers as the statute required, the collector assessed a "duty of 10 per centum of the value" pursuant to Section 1304 (b). Before paying the "duty," appellant filed a petition with the Secretary seeking remission or mitigation pursuant to 19 U.S. C.A. § 1618, which, as far as is material, follows: "Whenever any person * * * who has incurred, or is alleged to have incurred, any fine or penalty under the provisions of this chapter, files with the Secretary of the Treasury * * * before the sale of such * * * merchandise¹ * * * a petition for the remission or mitigation of such fine, penalty, or forfeiture, the Secretary of the Treasury * * * if he finds that such fine, penalty, or forfeiture was incurred without willful negligence or without any intention on the part of the petitioner to defraud the revenue or to violate the law, or finds the existence of such mitigating circumstances as to justify the remission or mitigation of such fine, penalty, or forfeiture, may remit or mitigate the same upon such terms and conditions as he deems reasonable and just, or order discontinuance of any prosecution relating thereto."

The petition set forth facts to show that the failure to mark the containers was without willful negligence or intention to defraud the revenue or violate the law, and that mitigating circumstances existed to justify remission or mitigation.² The Secretary refused to consider whether appellant excusably neglected to mark the goods, holding that the exaction was a "duty," as it is denominated in Section 1304 (b), and not a "penalty" within Section 1618. The collector then liquidated the entries, formally levying and assessing the 10% exaction. Appellant thereafter filed statutory protests, apparently under 19 U. S.C.A. § 1514, the last on March 13, 1937. The record does not show whether it took further action before the collector or the Customs Court. The complaint herein was filed September 29, 1939.

Appellant asserts that, in holding the exaction to be a duty rather than a penalty, the Secretary erroneously held himself to be without power or jurisdiction, and thus failed to exercise his discretion which, it is said, extends only to whether the claim should be granted, not to whether it is of the type which under some circumstances could be granted. It contends: (1) that the exaction was a penalty within Section 1618; (2) that whether it was such presented a question of the Secretary's "jurisdiction," rather than one of his discretion under the act; (3) that his erroneous decision of it is reviewable judicially; and (4) that it affords an appropriate occasion for judicial relief in the nature of mandamus.

On the contrary, appellee says no question of "jurisdiction" is presented. Whether the exaction is a duty or a penalty, he asserts, is one of the questions which the Act commits to his discretion, as is the further one whether there are mitigating circumstances to justify giving relief. Since he has determined the former adversely to the appellant's view, he contends that it became unnecessary to consider the petition further and his decision became final and conclusive upon the parties and the courts. The present suit, therefore, he characterizes as an effort to secure relief in the nature of mandamus as to an issue which the statute commits exclusively to his discretion and an attempt to interfere with the performance of an executive function. His decision, it is said, constituted action and decision upon appellant's petition, not a refusal to act upon and decide the matter. Finally, the Secretary contends that the exaction was in legal effect a duty and not a penalty.

Concededly, the exercise of the Secretary's discretion under the statute is not subject to control by mandamus. When a penalty is involved, the question whether mitigating circumstances existed and therefore whether relief shall be given is discretionary.³ If the question whether the exaction was a penalty likewise is within appellee's discretion or whether so or not, if he determined it correctly, the appellant is not entitled to relief.

But where an administrator erroneously holds himself to be without power to consider a claim, relief in the nature of mandamus generally may be given. Roberts v. United States ex rel. Valentine, 1900, 176 U.S. 221, 20 S.Ct. 376, 44 L.Ed. 443; Interstate Commerce Commission v. United States ex rel. Humbolt S. S. Co., 1912, 224 U.S. 474, 32 S.Ct. 556, 56 L.Ed. 849; United States ex rel. Louisville Cement Co. v. Interstate Commerce Commission, 1918, 246 U.S. 638, 38 S.Ct. 408, 62 L.Ed. 914. Appellant relies principally upon these cases and Helwig v. United States, 1903, 188 U.S. 605, 23 S.Ct. 427, 47 L.Ed. 614.

In the latter a statute conferred jurisdiction upon the circuit court of all suits relating to revenue from imports or tonnage, except those for penalties or forfeitures, as to which the District Court was given exclusive jurisdiction. A suit was instituted in the circuit court to recover a "further sum" or an "additional duty" imposed because the appraised value of the goods exceeded the declared value by the specified margin. The court held the exaction to be a penalty and the suit therefore beyond the circuit court's jurisdiction.

The case differs from the present one in that no question of administrative jurisdiction or of judicial power to define it was involved. The issue related to mutually exclusive jurisdiction of courts, which the statutes posited explicitly upon the penal character of the exaction. The only question was whether it constituted a penalty in legal effect, although defined in terms of a "further sum" and an "additional duty." There was no issue as to the jurisdictional nature and effect of the decision of that question when made. Here both questions are presented. The Helwig case does not conclude the question whether, in the present setting and for present purposes, the existence or nonexistence of a penalty raises a jurisdictional or a discretionary issue; nor do the other authorities relied upon by appellant and cited above. They decide merely that relief in the nature of mandamus may be given when an administrator decides erroneously a question which is jurisdictional and the effect is to prevent him from considering the merits or exercising his discretion.

Whether, for purposes of relief by mandamus against an administrative decision, a particular question presents an issue of administrative jurisdiction or a discretionary one is not ascertainable from exact criteria. That the question arises at the threshold of the administrator's duties, Commissioner of Patents v. Whiteley, 1866, 4 Wall 522, 18 L.Ed. 335; that it requires interpretation of a statute as well as consideration of facts, Roberts v. United States ex rel. Valentine, 1900, 176 U.S. 221, 20 S. Ct. 376, 44 L.Ed. 443; Carlisle v. United States ex rel. Waters, 1896, 7 App.D.C. 517; that in other contexts it might, or even normally would, bear upon the merits rather than the existence of power, United States ex rel. Louisville Cement Co. v. Interstate Commerce Commission, 1918, 246 U.S. 638, 38 S.Ct. 408, 62 L.Ed. 914;⁴ that its decision effectively disposes of the entire matter and prevents consideration of facts which, except for its presence, might require a different result, Carlisle v. United States ex rel. Waters, supra; that even a high decree of judgment may be required in making it, Roberts v. United States ex rel. Valentine, supra; and that judicial decision of the issue may determine the character of the decision which the administrator must make when the case is returned to him, United States ex rel. Louisville Cement Co. v. Interstate Commerce Commission, supra, are not conclusive considerations. The ultimate question is whether Congress intended to bring the particular issue within the administrator's discretion or to posit its exercise as to other matters upon the existence of...