David L. Moss Co. v. United States

GARRETT, Presiding Judge

(dissenting).

It is with some diffidence and, of course, with greatest respect that I express disagreement as to the result reached in this case. This disagreement runs both to the conclusion and to certain of the basic matters upon which that conclusion is predicated.

I shall content myself with a statement in somewhat general terms of the reasons which lead me to dissent, not entering at length into details.

I concur in the view expressed in the opinion by Judge PARKER that the United States Customs Court and this court, on appeal, have jurisdiction to determine whether the actions of the United States Tariff Commission were in conformity with the statute defining and limiting the Commission’s authority.

In the final analysis the precise question here involved is that of the validity of the President’s proclamation, not the validity of the Commission’s procedure or report. There is no claim of irregularity in the procedure pursued by the Commission in making its investigation nor is the accuracy of the report of primary facts based upon that investigation challenged. The claim is that the report itself, upon its face, shows a state of facts negativing the existence of a domestic egg albumen drying industry during the years 1928, 1929, and 1930, constituting the period taken as representative by the Commission for the purpose of comparing the costs of production of domestic and foreign articles. In brief, it is claimed that no domestic article within the meaning of “article,” as used in the tariff statutes, was being' produced during that period, and that the report itself so shows. It is further urged that if we go behind the report and examine the evidence taken in the course of the investigation it will be found that such evidence supports the negative finding which the importer attributes to the report.

I have long entertained, and now entertain, very grave doubt as to the authority of the courts to examine, as the majority of my associates have, the evidence taken before the Commission in cases such as that here presented, and I incline to the view that the reasoning of the Supreme Court in the case of Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294 , 53 S.Ct. 350 , 77 L.Ed. 796 , is adverse to such authority. I appreciate the fact that the issues presented in that case were different from the issue here, but much of the reasoning of the court there seems applicable here. Partly as a result of this feeling, and partly because it seemed tome unnecessary to go beyond the report itself to determine the issue, I have not given meticulous study to the record made up by the Tariff Commission. Of course, I accept without question the statements made by my associates as to the facts shown by that record, but so accepting them, and assuming for the purposes of this case that such facts properly may be considered, I agree with Judge Bland that they do not furnish any stronger basis than the report itself for the Executive proclamation. Upon the contrary, they support what I regard as being, in effect, a negative finding with respect to the existence, during the representative period, of a domestic industry producing dried egg albumen.

The strongest statement, indeed practically the only statement, to be found in the report as to the amount of dried egg albumen produced domestically during the representative period, is contained in a footnote in that part of the report where the Commission summarized its findings, which footnote reads: “In 1929 one company tray-dried about 100,000 pounds of liquid whites, partly to salvage them. In 1931 another company, by a modified spray method which eliminates the pressure nozzle, and by a painstaking heat control, asserts that it has developed a method which is adapted to mass production methods and labor costs in the United States.” [Italics supplied.]

It will be noted that the statement relative to what was done in 1931 (which incidentally was not one of the years embraced in the representative period) does not include any actual production but merely indicates a possibility of production. The poundage (100,000 pounds) stated to have been dried in 1929 (the only year of the representative period in which the report shows any to have been produced) was the weight of the whites before drying. The weight after drying, as is stated in the opinion by Judge PARKER, was approximately 10,000 pounds. It seems from statements in the report *405 that the importations of dried egg albumen during the three years of the representative period were in excess of ten million pounds. So, the domestic production was only one-tenth of 1 per centum of the total amount consumed. The report is replete with statements indicating clearly that the productions of dried egg albumen during the representative period were merely experimental in character. This is confirmed by the statement in the opinion of Judge PARKER, based upon an independent examination of the testimony taken by the commission, saying, “It is true that there was very little evidence as to production of dried egg albumen, and most of this was as to production of an experimental character.” I have no quarrel with the finding immediately following the above to the effect that the feasibility of production was established; also, I agree that production costs were ascertained, but those were the costs of the purely experimental productions. There was, as I view it, no other kind of production shown.

In the opinion by Judge PARKER it is assumed, without deciding, “that it was the intention of Congress that duties should be raised under the flexible provisions of the tariff act only in cases where a domestic industry was in existence which Congress desired to protect, and that it was not intended that the Commission should increase duties in an attempt to bring new industries into existence.” For reasons succinctly stated by Judge BLAND in his dissenting opinion, I agree with him that the assumption as stated is correct, and I would definitely hold it to be a part of the law of the case, as I also would the further assumption stated in the opinion by Judge PARKER, “that sporadic or experimental production would not satisfy the test of an existing domestic industry.”

Another view expressed in the opinion by Judge PARKER with which I am unable to agree is that in the determination of the issue before us the egg drying industry must be considered as a whole.

I do not understand from the report of the Commission that such view was taken by it. The investigation obviously covered separately the drying of whole eggs, the drying of yolks and the drying of albumen. Each of these products has a distinct place in the arts and for most purposes they cannot be used interchangeably, although for some uses frozen products can be substituted for dried products. Referring to albumen the report says: “Egg albumen (dried whites) is consumed in baking powders, in certain candies and marshmallows, and in prepared meringue or whipping powders. Neither frozen nor liquid whites can be used in baking powder, in the other prepared powders nor, apparently, in wholesale marshmallow manufacture. In the last few years there has been an extensive displacement of dried whites by the frozen in the manufacture of certain candies; i. e., packaged goods which move rapidly through retail channels. Many large pie bakers are also now using frozen whites in their meringues for soft pies, For ‘white’ cakes, frozen or liquid whites have entirely replaced dried whites.”

it js clear from the report that the methods of drying the respective products differ both in the United States and China, the principal foreign competing company, A spray process is said to be practicable for whole eggs and yolks, but the report statcs: “In the United States there has been some experimental drying of albumen by the spray method, but agitation caused by the pressure in the nozzle and by the high temperature used (not less than 163'’ F.) coagulates the albumen, and largely destroys its whipping property.”

it js noted that the discrepancies in production costs reported by the Commissjon differed with respect to each article, Thus, the cost of producing dried whole eggs in China was found to be 47.2 cents per p0Und and }n United States 89.5 cents per pound; the cost or dried egg yolk 4¿.8 cents per pound in China and 80 cents per pound in the United States; the cost of dried egg albumen 47.8 cents per p0Und in China and 107.3 cents per pound in the United States. So, the excess of the domestic over the foreign costs were found t0 be: “Dried whole egg, 42.3 cents Per pound; dried egg yolk, 33.2 cents per pound; and dried egg albumen, 59.5 cents Per pound.’

The majority opinion correctly states that “Effort was made to have Congress fix ,thc dut7 on the dried eSg products at a hi&her ra-te because necessary to the pro-Action of the egg producing industry,” ^ut that This was not done,

It is proper to say that this effort was made while the Congress, particularly the Senate, was considering the bill which became the Tariff Act of 1930.

From the very fact that the question was then presented and agitated without *406 effect in the. Congress itself; it seems to me that the deduction fairly may he drawn that, for reasons satisfactory to itself, the Congress evidenced an intention not to attempt to make possible the creation of a dried egg albumen industry by the levying of the extremely high duties requisite. While the Congress fairly may be assumed to have desired to give the egg industries generally a degree of protection, it may, I think, also fairly be assumed that it was indisposed to levy a tax ultimately to be paid by the consumers of dried egg albumen in an amount (if the duty was to be really effective) which the Commission’s report indicates would have been necessary.

I am aware of the fact that the deduction from the circumstances related, might be said also to apply to dried whole eggs and dried egg yolk, but, so far as the issues of this case are concerned, we have no occasion to inquire into that. We must assume, so far as this case is concerned, that drying whole eggs and egg yolks existed as domestic industries, and that those articles, as domestic articles, were entitled to have consideration under the flexible tariff system, but it seems to me that upon the facts developed by the Commission’s investigation the nonexistence of a domestic albumen drying industry was established and hence that there was no valid basis for that part of the Executive proclamation relating to that product. The fact that the procedure was had under a Senate resolution does not, in my opinion, affect ■ the legal situation.