Burns, Stix Friedman & Co. v. Commissioner

Raum, /., concurring: The conclusion of the majority is clearly correct, but its opinion appears to discuss considerations (e.g., the fact that the litigation before the Court involves the review of a determination of deficiency) which in my judgment are not of any constitutional significance. This concurring opinion is being filed to make clear that the power of Congress to establish this Court under article I of the Constitution to adjudicate Federal tax controversies does not depend upon such considerations and that the result can be reached by a simpler and more direct route, as follows:

First. It has long and repeatedly been recognized over the history of this country that Congress has the power to establish specialized courts or courts of limited jurisdiction outside of article III. 1 And although uttered in an entirely different context, the words of Mr. Justice Holmes in New York Trust Co. v. Eisner, 256 U.S. 345, 349 , are peculiarly apt here: “Upon this point a page of history is worth a volume of logic.”

Second. At least from the time of the Eevenue Act of 1926, when this tribunal was known as the Board of Tax Appeals up to the Revenue Act of 1942 when its name was changed to the Tax Court of the United States and from that point up until the enactment of the 1969 Act here under attack, this Court has functioned solely as a court and was given no nonjudicial powers by Congress. As we stated in Fairmont Aluminum Co., 22 T.C. 1377 , 1384 — 1385, affirmed 222 F. 2d 622 (C.A. 4), certiorari denied 350 U.S. 838 , rehearing denied 350 U.S. 905 , motion for leave to file second petition for rehearing denied 352 U.S. 913 :

Whatever label might be used to characterize this Court for various purposes, its proceedings are, and were intended by Congress to be, in every sense of the word, judicial.' It is required by statute to act, and does act, solely in a judicial manner, and exercises only judicial power. We hear and decide only real controversies between adverse parties, following procedures that are inherently judicial. We make no independent investigation of the facts as do some agencies labeled “administrative” either upon our own motion or upon the motion of one of tlie parties ;7 our findings of fact are based solely on evidence submitted to us by the parties in accordance with prescribed rules.8 We do not appear as parties in court to enforce our orders or the law as do so-called administrative agencies.9 Our findings of fact carry the same weight as those made by a District Court sitting without a jury.10 Our decisions are final and may be attacked, in the same manner as District Court decisions, only by appeal to a United States Court of Appeals.11

[Footnotes omitted.]

To be sure, this tribunal was described in the statute as an “independent agency” in the executive branch of the Government, but the fact is that the powers and duties which Congress committed to this tribunal were solely those of a court, and they contradicted the label (“independent agency”) placed upon it. Indeed its judicial (as opposed to administrative) character was of necessity recognized on numerous occasions, as for example in Tait v. Western Md. By. Co., 289 U.S. 620 , where an earlier adjudication by the Board of Tax Appeals was held to be res judicata in a subsequent suit in a Federal District Court. 2 Moreover, the constitutionality of the Board or the Tax Court has been explicitly sustained. See, e.g., Nash Miami Motors, Inc. v. Commissioner, 358 F. 2d 636 (C.A. 5), certiorari denied 385 U.S. 918 . Indeed petitioner does not challenge the constitutionality of the Court prior to the enactment of the 1969 statute.

Third. Nothing in the 1969 legislation made unconstitutional that which was valid prior thereto. Such changes as the increase in the terms of the judges from 12 to 15 years are constitutionally irrelevant. And the action of Congress in describing the Court as being established as a legislative court under article I and in endowing it with some comparatively minor additional powers was not of such nature as to alter the basic character of the Court as it existed prior thereto. Indeed the change in label from “independent agency” to “court” was more in the nature of a change to make the label speak the truth. (Cf. Kay v. Commissioner, 178 F. 2d 772, 773 (C.A. 3), where the Court of Appeals referred to this Court as “an independent judicial tribunal, even though anomalously placed by the Internal Revenue Code in the executive branch of the Government.) The Court was a constitutional judicial body prior to the 1969 Act and the validity of its continued existence thereafter was not affected by that Act.

Fat, Hoxt, TansteNwald, and Quealt, JJ., agree with this concurring opinion. See, e.g., Williams v. United States, 289 U.S. 553 , 565 et seq.; Ex parte Bakelite Corp’n., 279 U.S. 438 ; Wallace v. Adams, 204 U.S. 415 ; United States v. Coe, 155 U.S. 76, 85-86 ; Keller v. Potomac Elec. Co., 261 U..S. 428, 442-444; Romeu v. Todd, 206 U.S. 358, 368 ; McAllister v. United States, 141 U.S. 174 ; The "City ot Panama”, 101 U.S. 453, 460 ; Reynolds v. United States, 98 U.S. 145, 154 ; Good v. Martin, 95 U.S. 90, 98 ; Benner v. Porter, 9 How. 235, 242 ; and American Insurance Co. v. Canter, 1 Pet. 511, 545 .

We do not believe that these eases were overruled by Mr. Justice Harlan’s opinion in Glidden Co. v. Zdanok, 370 U.S. 530 . Surely, if so drastic a result had been intended, the opinion would have explicitly so stated. Moreover, that opinion represents the views of only three of the seven justices who participated in the decision of that ease, and cannot be taken to reflect the conclusions of a majority of the Court.

The decision oí the Board had been entered after a reversal by a circuit Court of Appeals (see 289 1 U.S. at 622), but nothing in the Supreme Court’s decision turned upon that fact. It is plain that the same result would have been reached had the decision of the Board been unreviewed.