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Judge MARKEY. This is only a conjecture, but I suspect it is pretty valid. I suspect it was inserted for the reason that there has been in the past plaintiffs to the Customs Court saying that they were being irreparably injured at that moment by some action by the Customs Service. The court has felt that it had no power to act. It has not under this statute until a protest is filed and denied.
So, nothing has happened.
I think the desire which led to the inclusion in the bill of the temporary injunction was just that—to handle that kind of irreparable situation.
Permanent injunction, of course, is another matter. That does tend to move the final action ahead because, obviously, if there is a permanent injunction, it is permanent, and there it is. You can always come in and try to get it removed.
However, in order to decide whether to issue it or not, you just about have to hear the whole case. There has been no exhaustion of the administrative remedy. The challenged act had not been completed at that time.
So, this is one of the stickiest areas in this whole subject of irreparable injury, and the power of the court to act early, so to speak, before exhaustion of the administrative remedies.
It is one of the stickiest of all segments in the bill.
I think some analogies can be drawn to similar activities in other agencies. But, I think not many. I think we have to be very careful as to how far we go in drawing such analogies.
We should keep in mind that we are not dealing with the same kind of situation. There is no constitutional right to import. There is no constitutional right for even the maintenance of the same customs duties for the same goods forever. Congress has kept customs duties, as it has kept all revenue items and all tax items, very close to its vest. Congress has done this since it began.
They have treated the entire subject of taxes quite differently from other subjects. I think rightly so.
The notions that the plaintiff in the Customs Court should have all the rights, and so on, of all other plaintiffs and all other parties, I think is fundamentally in error. That would be a fundamental mistake to make.
Mr. ALTIER. The subcommittee has received several comments concerning the use of the complaint instead of the summons in the Customs Court. Mr. Vance, later this morning, will indicate that the language in the bill should authorize use of a summons or complaint with the ultimate decision being left to the rules of the Customs Court.
Do you have any comments on the use of either or both ?
Judge MARKEY. Yes. That is one of the areas, for example, that I believe the court could work out if the bill were passed as it now stands, calling for a complaint.
As I understood Mr. Vance's analysis, filed on June 15 to the subcommittee, his main concern was the necessity of the Government, the Customs Service, filing an answer in every single case. They do not now need to do so when only a summons is filed.
Of course, there are ways around that. There is extension of time to file an answer while negotiations in settlement are underway. There
is the motion to dismiss where it is thought to be a frivolous complaint, and so on.
I gather the same content would occur whether it be a complaint or summons.
Mr. Vance will state today in his prepared testimony that there should be an alternate summons or complaint in two areas, and in two or three others only the word "summons.” It is a matter for the Customs Court. It is a matter for the bar. It is not a matter for the Appeals Court, so we would not be prominently involved one way or the other.
But, it is one of those things, as I say, that I think we would work out regardless of which way you go. When I say “we,” I include the Customs Court and the bar. I think that it is the kind of thing that could be lived with.
On the other hand, if both the bar and the Customs Court are satisfied with the summons, then our court would have no objection.
Mr. ALTIER, I have one last question.
Section 1583 of the bill denies any appeal from rulings or internal advice. Do you disagree or agree with this type of approach?
Judge MARKEY. By that do you mean appeals through the Customs Court from the Customs Service or the International Trade Commission?
Mr. ALTIER. Yes.
Judge MARKEY. I thoroughly agree. It is part of what I said a moment ago. It is of a piece with what I said about courts interfering with what is going on inside the Customs Service, the International Trade Commission, and the Office of the Secretary of the Treasury.
I am not sure I would like to be heading up any of those agencies if internal advice and the advice given to members of the public were reviewable, where there has not been an actual imposition of anything in the way of duties, or a refusal to impose countervailing duties, and no fundamental decision of the organization. We ought to keep our fingers off that.
Mr. ALTIER. It is not true that those rulings are internal advice, and are they not final ? Does not the Customs Service have to abide by those and a later decision regarding an entry or an importation ?
Judge MARKEY. Yes.
Mr. ALTIER. And, if they are final, should they not be appealable to the Customs Court?
Judge MARKEY. They should be appealable to the Customs Court the first time they are exercised. That is to say, if a regulation or internal advice or a ruling is set up but nothing has happened, nothing has been imported, and nobody has had duties imposed, et cetera, then that is in essence an advisory type of opinion coming out of the Customs Court.
We know that is not the business of the court, that is, to be giving advisory opinions. It may be annoying. But, this would make us a member of the Commission, of the Customs Service, and of the Secretary of the Treasury's office. We would be participating in what is going on inside.
If I understand the thrust of the provision, that is how I feel. There is time enough for the court to step in when the ruling has been enforced, or at that time. For all we know, it may never be. The Customs
Service or the Commission or the Secretary may change his mind when he gets a reaction from the public, and so on. We have to stay out of it. It almost seems unnecessary to say that, or to put it in the bill.
Mr. ALTIER. Thank you very much.
Senator DECONCINI. Judge, I want to thank you very much for your testimony. We may call on your expertise in the process of attempting to mark this bill up. I wish you would extend, again, my thanks to each member of your court for providing us with your services and testimony today.
Judge Markey. We will hold ourselves available, Mr. Chairman, to the chairman of the staff whenever we are needed.
Senator DECONCINI. Thank you.
Our next witness is Peter M. Gerhart, assistant professor of law, Ohio State University, and consultant, Administrative Conference of the United States. We see that you are accompanied by Jeffrey S. Lubbers, staff attorney, Office of the Chairman, Administrative Conference of the United States.
Mr. Gerhart, you may proceed. STATEMENT OF PETER M. GERHART, ASSISTANT PROFESSOR OF
LAW, OHIO STATE UNIVERSITY AND CONSULTANT, ADMINISTRATIVE CONFERENCE OF THE UNITED STATES, ACCOMPANIED BY JEFFREY S. LUBBERS, STAFF ATTORNEY, OFFICE OF THE ADMINISTRATIVE CONFERENCE OF THE UNITED STATES
Mr. GERHART. Mr. Lubbers will begin, Mr. Chairman.
Senator DECONCINI. I have not had a chance to read your article, but I intend to take it with me on the airplane this week, and I will review it.
Mr. LUBBERS. Thank you very much, Mr. Chairman. My name is Jeffrey Lubbers. I am a staff attorney in the Office of the Chairman of the Administrative Conference of the United States.
With me is Peter M. Gerhart, assistant professor of law, Ohio State University School of Law and consultant for the Administrative Conference.
Before I turn over the microphone to Professor Gerhart who, if I may say, is an expert on the judicial review of actions of the U.S. Customs Service, I want to take 1 minute to give you some background on the Administrative Conference and its interest in S. 2857.
The Conference was established as an independent Federal agency of the U.S. Government in 1964. Its mandate is to study the administrative procedures of Government agencies and recommend improvements to the President, the Congress, the courts, and the agencies themselves.
The Conference has issued over 70 formal recommendations on various aspects of administrative procedure. We are here this morning to acquaint the committee with the conference's recommendation 77-2, adopted in September 1977. It concerns the judicial review of Customs Service actions.
This recommendation was developed after 11 years study by Professor Gerhart and oversight by the conference's Standing Committee on Judicial Review.
During the course of the drafting of the report and recommendations, Professor Gerhart and our office solicited comments from over 50 members of the customs community, some of whom are testifying at these hearings.
We received many helpful and supportive comments and, as the project unfolded, we began to understand the deep feeling in support of our conclusion that there is a pressing need for reform in this area. We believe there is a problem to be solved in terms of upgrading the status and enlarging the jurisdiction of the Customs Court and in improving access to that court.
We commend the committee for its interest and enthusiasm in holding these hearings. We hope that a Customs Court Act will emerge during this or perhaps the next Congress.
If you have any questions about the Adminstrative Conference, I would be glad to answer them.
Otherwise, I would now like to turn over the microphone to Professor Gerhart for more substantive comments.
Senator DECONCINI. Thank you, Mr. Lubbers.
Mr. GERHART. Mr. Chairman, let me first commend you for your efforts to reform the laws relating to imports. Certainly the job needs leadership if it is to get done.
Because S. 2857 would implement many of the recommendations made by the Administrative Conference, the Conference supports the general thrust and many of the specific provisions of the legislation. But there are some matters on which the recommendations of the Administrative Conference differ from the provisions of the proposed Customs Court Act, noticeably with respect to standing to challenge actions of the Customs Service and, less significantly, with respect to some aspects of the jurisdiction of the Customs Court.
I will point out these differences in a moment and discuss the reasons underlying the Administrative Conference's recommendations.
There are also many matters covered by the bill that the Administrative Conference has not studied and as to which we can make no recommendation. We would, however, like to give you our personal comments on some of those aspects of the especially some of the matters with respect to the drafting of the proposed legislation.
Let me first summarize the recommendations of the Administrative Conference and discuss how they would be implemented by the proposed legislation.
First, the Conference recommended that the jurisdiction of the Customs Court be expanded to permit the court to review all final actions of the Customs Service except in 2 narrow classes of cases. This change is necessary to ensure that all actions of the Customs Service which should be subject to judicial review will be subject to judicial review, and that judicial review occurs in the forum that is best suited for meaningful review,
We are happy to note that that recommendation would be implemented by the new legislation.
The first exception to the jurisdictional recommendation of the Administrative Conference is that matters already subject to review in another court would not be reviewed by the Customs Court. Those are
the general matters that are listed in subsection (e) of section 1583 of the proposed bill.
Second, our recommendation would not have the Customs Court review cases in which goods are excluded by an agency other than the Customs Service under a law that is not a customs law. This exception to the recommended jurisdiction of the Customs Court differs from the proposed legislation. In section 1585 of the proposed legislation, the legislation apparently continues the existing and, in our mind, unworkable distinction between exclusion under a customs law and exclusion under a law that is not a customs law.
In our mind, the jurisdiction should be based upon a different distinction. The division of jurisdiction between the district court and the Customs Court should be based upon which agency makes the decision to exclude merchandise. If the decision to exclude merchandise is made by the Customs Service, whether or not under a customs law, that decision should be reviewed by the Customs Court. On the other hand, if the decision to exclude merchandise is made by an agency other than the Customs Service, then that decision should be reviewed by the court that normally reviews the decisions of that agency.
This will insure that the Customs Court has jurisdiction over all decisions made by the Customs Service. It will insure that a uniform body of law will be developed that will avoid the problems which have arisen and which require a litigant to make an esoteric determination of what is and what is not a customs law. On the other hand, the Customs Court should not have jurisdiction if the subject matter is generally within the expertise of another court, which is usually true when an agency other than Customs Service makes the decision.
The second recommendation of the Administrative Conference, that contained in paragraph A(2), would give the Customs Court all the remedial powers of a district court. That recommendation would be implemented by a new section 1582 in the legislation, which we support.
The third recommendation of the Administrative Conference, contained in paragraph A (3) of the recommendations, would delete the requirement that not more than five of the nine judges of the Customs Court be of the same political party, and the requirement that the Chief Judge be appointed by the President. That is, we recommend that the Chief Judge be appointed by the President with the advice and consent of the Senate.
These recommendations would be implemented by section 201 of the bill, which we also support, except that the bill does not provide for advice and consent by the Senate when the Chief Judge of the Customs Court is selected. We believe that the Senate should be involved in the selection of a Chief Judge in order to provide the proper checks and balances to the Presidential selection.
The fourth recommendation of the Administrative Conference relates to standing to sue the challenge actions of the Customs Service.
This is a major matter over which there is a difference between our recommendation, the bill, and the proposals of several other parties who are appearing before this subcommittee.
The recommendation of the Administrative Conference is that Congress enact the flexible test from the Administrative Procedure Act that any adversely affected person may challenge customs action,