Mississippi River Fuel Corporation v. The United States

DAYIS, Judge

(concurring).

The central factor in this case, for me, is the decision of this court, some three- and-a-half years ago, in Russell Manufacturing Co. v. United States, 146 Ct.Cl. 833 , 175 F.Supp. 159 (1959). All agree that that ruling is precisely controlling, unless it is to be overruled as incorrect. The defendant — marshalling all of the points supporting its stand — asks the court to take that step. In responding to the invitation, we must start, in my view, with the premise that the disposition of this case cannot be approached as if Russell Manufacturing had never been decided. The question is not what we would hold if we now took a fresh look but whether we should take that fresh look. A court should not scrutinize its own prior ruling — putting constitutional adjudication, which has its own standards, to one side — merely because, as now constituted, it might have reached a different result at the earlier time. Something more is required before a reexamination is to be undertaken: (a) a strong, even if not yet firm, view that the challenged precedent is probably wrong; (b) an inadequate or incomplete presentation in the prior case; (c) an intervening development in the law, or in critical comment, which unlocks new corridors; (d) unforeseen difficulties in the application or reach of the earlier decision; or (e) inconsistencies in the court’s own rulings in the field. Where these or like reasons for re-opening are lacking, respect for an existing precedent is counselled by all those many facets of stability-plus-economy which are embodied in the principle of stare decisis. Cf. Flippin Materials Co. v. United States, Ct.Cl., decided Jan. 11, 1963, 312 F.2d 408 , 417.

I can find no sufficient reason for a reconsideration here. Certainly, it is far from clear that the Russell Manufacturing opinion is wrong, if it be wrong at all; even from the Government’s viewpoint, the issue must be considered very close. By design or inadvertence, the bare language of Section 23 (p) seems to fit’ snugly with the court’s result, and the legislative history which the defendant offers is not conclusive (though it tends) the other way. The possible disharmony with the general law of taxation in allowing the plaintiff to take a deduction for the payments made in 1953 by another taxable entity (the trustee) would be matched or more than matched (if defendant were to prevail) by the disharmony of altogether disallowing any deduction for a genuine business expense. No basic tax policy is disserved, so far as I can see, by the court’s holding. The Government's position is narrow. Its primary point is that we should follow this statute as written and that Congress wrote it so as to bar any deduction at any time for plaintiff’s payments to the fund, even though slightly altered plans would have allowed deductions. This may possibly be a correct reading of the particular legislation, but it is not clearly so, and no wide or awkward consequences of significance flow from the contrary construction. Defendant stresses the Treasury Regulation which Russell Manufacturing held invalid, but the normal deference to such regulations is sharply lessened in this instance by the six-year gap between the enactment *959 of Section 23 (p) in 1942 and the 1948 amended regulation on which the Government relies.

There is no other proper basis for reevaluation of the earlier decision. One suggestion is that in 1959 the defendant failed to present the legislative history adequately. But the basic documents and arguments were then before the court; the additions now made are merely peripheral. The claimed direct conflict with Wesley Heat Treating Co. v. Commissioner, 267 F.2d 853 (C.A.7, 1959), does not exist. Unlike plaintiff, that taxpayer sought its deductions, not under Section 23(p) (1) (D), but under Section 23(a) (the general provision for deduction of business expenses under the 1939 Code); the Seventh Circuit rightly held that, for employee payments of this general type, Section 23 (p) governs exclusively. The professional comment on Russell Manufacturing, which appears to be divided, 5 is not such as to induce reconsideration. Nor are there other post-1959 developments which we are asked to take into account.

The net of it is that this is a proper case in which to decline the bid to reexamine our prior ruling. For us, what was decided yesterday should do for today. I join, therefore, in the judgment for the taxpayer, on the authority of the Russell Manufacturing decision.

LARAMORE, Judge, concurring in the opinion of the court also joins in the concurring opinion.

. Pro: 4 Mertens, Law of Federal Taxation, Sec. 25B.42; Executive, Compensation : Deferring Compensation (Excluding Stock Options and Qualified Pension Plans), Twentieth Annual N.Y.U. Institute on Federal Taxation, pp. 405 (1962) ; 45 Va.L.Rev. 1249 (1959) ; 13 Vand.L.R. 461 (1960) ; Con.: 28 Geo.Wash.Univ. L.R. 803 (1960) ; 58 Mich.L.Rev. 799 (1960).