David L. Moss Co. v. United States

• Decision Date: 27 March 1939
• Docket Number: Customs Appeal No. 4114.
• Citation: David L. Moss Co. v. United States, 103 F.2d 395, 26 CCPA 381 (Cust. Ct. 1939)
• Parties: DAVID L. MOSS CO., Inc., v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

26 CCPA 381, 103 F.2d 395 (1939)

DAVID L. MOSS CO., Inc., v.UNITED STATES.

Customs Appeal No. 4114.

Court of Customs and Patent Appeals.

March 27, 1939.

Barnes, Richardson & Colburn, of New York City(Albert MacC.Barnes, Joseph Schwartz, and J. Bradley Colburn, all of New York City, of counsel), for appellant.

Webster J. Oliver, Asst. Atty. Gen. (Charles D. Lawrence, Sp. Asst. to Atty. Gen., and Joseph F. Donohue, Sp. Attorney, of Nutley, N. J., of counsel), for the United States.

Before GARRETT, Presiding Judge, and BLAND, HATFIELD, and LENROOT, Associate Judges, and PARKER, Judge of United States Circuit Court of Appeals for Fourth Circuit.

PARKER, Judge.¹

This is an appeal by the importer from a judgment of the United States Customs Court, Third Division, overruling a protest by the appellant against the liquidation and assessment of duty made by the collector of customs at New York on an importation of dried egg albumen.The Tariff Act of 1930, paragraph 713, § 1,19 U.S.C.A. § 1001, par. 713, imposed a duty of 18 cents per pound upon "dried whole eggs, dried egg yolk, and dried egg albumen."Pursuant to Senate Resolution the Tariff Commission held a hearing under section 336 of that act, 19 U.S.C.A. § 1336, and made a report to the President, finding that the duty fixed by the statute on these dried egg products did not equalize the differences in costs of production of the domestic articles and of the like or similar foreign articles produced in the principal competing country, and that the differences in cost were such as to warrant an increase in the duty by the maximum amount permitted by law, viz, 9 cents per pound.Acting upon this report, the President issued a proclamation (T.D. 44997) increasing the duty to 27 cents.The appellant complains of this increase of duty insofar as it applies to dried egg albumen, contending that the Commission's report to the President, as well as the evidence taken before it, show that there was no domestic production of dried egg albumen upon which a finding of cost of production of the domestic article could be predicated, and that consequently the action of the Commission and the proclamation of the President, in so far as they affected the duty on this product, were without legal basis and therefore void.

In the lower court, the evidence taken before the Commission was introduced and, although regarded by that court as immaterial, it was made a part of the record in the case and is before us.The court denied relief to appellant on the ground that it was without legal authority to review the findings of the Tariff Commission or the action of the President based thereon.Two questions, as we viewthe case, are presented by the appeal: (1) whether the court could look behind the action of the Tariff Commission and the President in increasing duties under section 336 of the act for the purpose of determining whether such action was supported by evidence before the Commission; and (2) if so, whether the increase of duties here complained of was so supported.We think that both of these questions must be answered in the affirmative.

It is true, as pointed out by counsel for the Government, that the Customs Court is given no direct right of review over action of the Tariff Commission.This does not mean, however, that it is without power to consider the legality of increase of duties resulting from the Commission's action.The court is a court of law, and it is granted full power to relieve against illegality in the assessment or collection of duties.19 U.S.C.A. §§ 1515,1518.If relief may not be had before it against illegal action under the flexible tariff provisions, relief may not be had anywhere; for its jurisdiction in such matters is exclusive.It is the tribunal established by Congress in the provision of a complete system of corrective justice for the administration of the customs laws, and questions involving the validity of official action in the imposition and collection of duties are properly cognizable before it to the exclusion of other courts.Cottman Co. v. Dailey, 4 Cir., 94 F.2d 85, 88;Riccomini v. United States, 9 Cir., 69 F.2d 480, 484;Gulbenkian v. United States, 2 Cir., 186 F. 133, 135;Nicholl v. United States, 7 Wall. 122, 130, 19 L.Ed. 125.There can be no question but that courts must exercise the judicial power vested in them to determine the legal validity of administrative action, where the validity of such action is involved in questions properly before them, whether they have been granted the right of review over action of the administrative agency or not.The duty necessarily arises because of their obligation to decide cases before them according to law.SeeShields v. Utah Idaho Cent. R. R. Co., 305 U.S. 177, 59 S.Ct. 160, 83 L.Ed. ___, Crowell v. Benson, 285 U.S. 22, 58, 59, 52 S.Ct. 285, 76 L.Ed 598;United States v. Passavant, 169 U.S. 16, 18 S.Ct. 219, 42 L.Ed. 644;St. Louis Smelting & Ref. Co. v. Kemp, 104 U.S. 636, 641, 26 L.Ed. 875;United States v. Haviland & Co., 2 Cir., 177 F. 175.

Where the question as to the validity of administrative action under the flexible tariff provisions relates to procedural matters, such as the holding of a hearing or the giving of proper notice thereof, the decisions of this court are clear to the effect that it has the power to consider whether the action of the administrative officer was within the power granted by Congress.Thus in the case of Carl Zeiss, Inc. v. United States, 76 F.2d 412, 416, 23 C.C.P.A., Customs, 7, T.D. 47654, where the point involved was the giving of notice of investigation by the Tariff Commission, the court, speaking through Judge Hatfield, said:

"The President, although not required by the provisions of section 336, supra, to accept the results or findings reported by the Tariff Commission, is required to limit his consideration of the case to the evidence presented to that body, and to approve the rates of duty and changes in basis of value specified by it, `if in his judgment such rates * * * and changes in basis of value are shown by such investigation * * * to be necessary to equalize such differences in costs of production.'Feltex Corp. v. Dutchess Hat Works, 71 F.2d 322, 323, 21 C.C.P.A. (Customs) 463, T.D. 46957.

"For the purposes of the provisions of section 336, supra, the President of the United States is the agent of the Congress, and he may not act under those provisions until a legal investigation has been made by the Tariff Commission.One of the prerequisites of such an investigation is the giving of "reasonable public notice" thereof to all interested parties, in order that they may, if they so desire, be present, produce evidence, and be heard.* *

* * * * * *

"For the reasons stated, we must hold that the proclamation of the President was without authority of law, illegal, and void * * *."

And in Akawo & Co. v. United States, 77 F.2d 660, at page 663, 23 C.C.P.A., Customs, 75, at page 79, T.D. 47737, decided under the flexible provision of the 1922 act, the rule is stated by the court, as follows: "That a legal investigation by the Tariff Commission is a condition precedent to a lawful proclamation by the President, under the provisions of section 315(a), (b), and (c), supra, has been repeatedly held by this court.Citing cases."

And there is no reason why the same rule should not be applied where the question of jurisdiction arises upon a contention that the action of the Commission and the President was contrary to law because without substantial support in the evidence adduced upon the investigation.The act contemplates, not merely that the Commission shall conduct an investigation with notice and hearing, but also that it shall base its findings and recommendations embodied in its report on what is shown by the investigation, and that the President in forming his judgment shall be confined to what is so shown.As said by Judge Lenroot, speaking for this court in Feltex Corp. v. Dutchess Hat Works, 71 F.2d 322, 330, 21 C.C.P.A., Customs, 463, T.D. 46957:

"Under the provisions of section 336 of the Tariff Act of 1930 * * * the President, in forming his judgment, is confined to a consideration of the facts secured by the Tariff Commission in its investigation, and is further limited to approval of the rates specified by the Commission if he finds, from such investigation, that the rates so specified are necessary to equalize costs of production.

"We can find nothing in the statute which limits the President to a consideration of the report of the Tariff Commission, but we think the fair construction of section 336 is that the President, upon a report coming to him from the Tariff Commission, may require such Commission to place before him all the facts secured by it in its investigation, and from such facts the President may determine whether the rates specified in the report of the Commission should be approved."

It is clear, therefore, that an investigation must be conducted and a hearing had by the Commission as a basis for action under the act; and, if such evidence is not taken, action is not authorized.St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 51, 56 S.Ct. 720, 80 L.Ed. 1033.When the question is properly raised, the courts must determine whether this prerequisite to action has been complied with; and compliance is not shown by a mere showing that an investigation has been conducted and a report made.Of course, under the maxim omnia præsumuntur rite esse acta, the proclamation of the President makes a prima facie showing of authority; but if it is established before the court that there was no substantial evidence before the Commission upon which action complained of could have been based, such action must be held void because not within the authority granted by Congress.It is settled that, where an order of a commission can be made only after hearing, it is void if unsupported by the...