Ex parte Bakelite Corporation. riginal

• Decision Date: 20 May 1929
• Docket Number: No. 17,O,17
• Parties: Ex parte BAKELITE CORPORATION. riginal
• Court: U.S. Supreme Court

279 U.S. 438

49 S.Ct. 411

73 L.Ed. 789

Ex parte BAKELITE CORPORATION.

No. 17, Original.

Argued Jan. 2 and 3, 1929.

Decided May 20, 1929.

Mr. Samuel M. Richardson, of New York City, for petitioner.

[Argument of Counsel from pages 439-441 intentionally omitted] Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., and Robert P. Reeder, Sp. Asst. to Atty. Gen., for Judges of Court of Customs Appeals.

[Argument of Counsel from pages 442-446 intentionally omitted] Mr. Meyer Kraushaar, of New York City, for Frischer & Co., Inc., and others.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This is a petition for a writ of prohibition to the Court of Customs Appeals prohibiting it from entertaining an appeal from findings of the Tariff Commission in a proceeding begun and conducted under section 316 of the Tariff Act of 1922, c. 356, 42 Stat. 858, 943; sections 174-180, title 19, U. S. C. (19 USCA §§ 174-180). A rule to show cause was issued; return was made to the rule; and a hearing has been had on the petition and return.

Section 316 of the Tariff Act is long and not happily drafted. A summary of it will suffice for present purposes. It is designed to protect domestic industry and trade against 'unfair methods of competition and unfair acts' in the importation of articles into the United States and in their sale after importation. To that end it empowers the President, whenever the existence of any such unfair methods or acts is established to his satisfaction, to deal with them by fixing an additional duty upon the importation of the articles to which the unfair practice relates, or, if he is satisfied the unfairness is extreme, by directing that the articles be excluded from entry.

The section provides that, 'to assist the President' in making decisions thereunder, the Tariff Commission shall investigate allegations of unfair practice, conduct hearings, receive evidence, and make findings and recommendations, subject to a right in the importer or con- signee, if the findings be against him, to appeal to the Court of Customs Appeals on questions of law affecting the findings. There is also a provision purporting to subject the decision of that court to review by this Court upon certiorari. Ultimately the commission is required to transmit its findings and recommendations, with a transcript of the evidence, to the President, so that he may consider the matter and act thereon.

A further provision declares that 'any additional duty or any refusal of entry under this section shall continue in effect until the President shall find and instruct the Secretary of the Treasury that the conditions which led to the assessment of such additional duty or refusal of entry no longer exist.'

The present petitioner, the Bakelite Corporation, desiring to invoke action under that section, filed with the Tariff Commission a sworn complaint charging unfair methods and acts in the importation and subsequent sale of certain articles and alleging a resulting injury to its domestic business of manufacturing and selling similar articles. The Commission entertained the complaint, gave public notice thereof and conducted a hearing, in which interested importers appeared and presented evidence claimed to be in refutation of the charge. The Commission made findings sustaining the charge, and recommended that the articles to which the unfair practice relates be excluded from entry. The importers appealed to the Court of Customs Appeals, where the Bakelite Corporation challenged the court's jurisdiction on constitutional grounds. The court upheld its jurisdiction and announced its purpose to entertain the appeal. Thereupon the Bakelite Corporation presented to this Court its petition for a writ of prohibition. Pending a decision on the petition further proceedings on the appeal have been suspended.

The grounds on which the jurisdiction of the Court of Customs Appeals was challenged in that court, and on which a writ of prohibition is sought here, are:

(1) That the Court of Customs Appeals is an inferior court created by Congress under section 1 of article 3 of the Constitution, and as such it can have no jurisdiction of any proceeding which is not a case or controversy within the meaning of section 2 of the same article.

(2) That the proceeding presented by the appeal from the Tariff Commission is not a case or controversy in the sense of that section, but is merely an advisory proceeding in aid of executive action.

The Court of Customs Appeals considered these grounds in the order just stated, and by its ruling sustained the first and rejected the second. 16 Ct. Cust. App. 378, 53 Treasury Decisions, 716.

In this Court counsel have addressed arguments, not only to the two questions bearing on the jurisdiction of the Court of Customs Appeals, but also to the question whether, if that court be exceeding its jurisdiction, this Court has power to issue to it a writ of prohibition to arrest the unauthorized proceedings.

The power of this Court to issue writs of prohibition never has been clearly defined by statute¹ or by decisions.² And the existence of the power in a situation like the present is not free from doubt. But the doubt need not be resolved now, for, assuming that the power exists, there is here, as will appear later on, no tenable basis for exercising it. In such a case it is admissible, and is common practice, to pass the question of power and to deny the writ because without warrant in other respects.³ While article 3 of the Constitution declares, in section 1, that the judicial power of the United States shall be vested in one Supreme Court and in 'such inferior courts as the Congress may from time to time ordain and establish,' and prescribes, in section 2, that this power shall extend to cases and controversies of certain enumerated classes, it long has been settled that article 3 does not express the full authority of Congress to create courts, and that other articles invest Congress with powers in the exertion of which it may create inferior courts and clothe them with functions deemed essential or helpful in carrying those powers into execution. But there is a difference between the two classes of courts. Those established under the specific power given in section 2 of article 3 are called constitutional courts. They share in the exercise of the judicial power defined in that section, can be invested with no other jurisdiction, and have judges who hold office during good behavior, with no power in Congress to provide otherwise. On the other hand, those created by Congress in the exertion of other powers are called legislative courts. Their functions always are directed to the execution of one or more of such powers, and are prescribed by Congress independently of section 2 of article 3; and their judges hold for such term as Congress prescribes, whether it be a fixed period of years or during good behavior.

The first pronouncement on the subject by this Court was in American Insurance Co. v. Canter, 1 Pet. 511, 7 L. Ed. 242, where the status and jurisdiction of courts created by Congress for the Territory of Florida were drawn in ques- tion. Chief Justice Marshall, speaking for the court, said (page 546):

'These Courts, then, are not constitutional Courts, in which the judicial power conferred by the Constitution on the general government, can be deposited. They are incapable of receiving it. They are legislative Courts, created in virtue of the general right of sovereignty which exists in the government, or in virtue of that clause which enables Congress to make all needful rules and regulations, respecting the territory belonging to the United States. The jurisdiction with which they are invested, is not a part of that judicial power which is defined in the 3d article of the Constitution, but is conferred by Congress, in the execution of those general powers which that body possesses over the territories of the United States.'

That ruling has been accepted and applied from that time to the present in cases relating to territorial courts.⁴

A like view has been taken of the status and jurisdiction of the courts provided by Congress for the District of Columbia. These courts, this Court has held, are created in virtue of the power of Congress 'to exercise exclusive legislation' over the district made the seat of the government of the United States, are legislative rather than constitutional courts, and may be clothed with the authority and charged with the duty of giving advisory decisions in proceedings which are not cases or controversies within the meaning of article 3, but are merely in aid of legislative or executive action, and therefore outside the admissible jurisdiction of courts established under that article.⁵

The United States Court for China and the consular courts are legislative courts created as a means of carrying into effect powers conferred by the Constitution respecting treaties and commerce with foreign countries. They exercise their functions within particular districts in foreign territory, and are invested with a large measure of jurisdiction over American citizens in those districts.⁶ The authority of Congress to create them and to clothe them with such jurisdiction has been upheld by this Court and is well recognized.⁷

Legislative courts also may be created as special tribunals to examine and determine various matters, arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it. The mode of determining matters of this class is completely within congressional control. Congress may reserve to itself the power to decide, may delegate that power to executive officers, or may commit it to judicial tribunals.⁸

Conspicuous among such matters are claims against the United States. These may arise in many ways and may be for money, lands, or other things. They all admit of legislative or executive...