The question of abolition of judicial review under customs law is decidedly different than the one which was raised before this committee in connection with the right of jury trial in suits against the Collector of Internal Revenue as that question was considered in connection with Reorganization Plan No. 1 of 1952. A suit for the return of illegal exactions of taxes under the internal revenue laws is a suit against the Collector of Internal Revenue personally. It is the recognition of a common law right to sue the taker of taxes whatever his name, or the name of his office may be. This action is akin to the common law action in assumpsit for money had and received, and derives its basis authority from the common law and not from statute. It is probably good, against anyone who takes taxes illegally. The action is personal and not against the United States. There seems to be no doubt that this right of action survives any change in name, or change in the functions of the person who actually takes the taxes illegally.

The customs laws on the other hand provide specifically for a suit against the United States for the refund of money illegally collected as duties or exactions. There is not, and has not been for years, any personal action against the collector. The right to sue the United States for the return of duties or exactions illegally taken appears in the Tariff Act of 1930 containing most specific details and the-most specific direction to the "collector of customs" and others. The abolition of the "collector of customs," and the scrambling of his functions, is the abolition of this judicial review plan.

Certain mandatory duties of collectors of customs and appraisers of merchandise were established by Congress to the end that the right to contest illegal customs exactions of any kind could be made fair, convenient, and effective. This right to a day in court begins with the statutory requirement that collectors and appraisers shall give adequate notice of their official action; that such notice shall be given at the port of entry; that records shall be kept at that port; and that appeals to reappraisement or protests against classification may be filed against their official action within a limited time after such notice is given. These preliminary duties or functions are set forth in sections 501 and 505 of the Tariff Act of 1930 (19 U. S. C. secs. 1501 and 1505), which provide as follows: "The collector shall give written notice of appraisement to the consignee, his agent or attorney if

(1) The appraised value is higher than the entered value, or

(2) A change in the classification of the merchandise results from the appraiser's determination of value.

"The decision of the appraiser shall be final and conclusive * * * unless a written appeal for a reappraisement is filed with or mailed to the United States Customs Court by the collector within sixty days, or filed by the consignee or his agent with the collector within thirty days after the date of personal delivery, or if mailed, the date of mailing of written notice of appraisement to the consignee his agent or his attorney. * [Italics ours.]

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Section 505, Tariff Act of 1930 (19 U. S. C. 1505), provides:

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"The consignee shall deposit with the collector * the amount of duty estimated to be payable thereon. Upon receipt of the appraiser's report and the various reports of landed weight, gage or measurement, the collector shall ascertain, fix and liquidate the rate and amount of duties to be paid * and shall give notice of such liquidation and include any increase or additional duties due or refund any excess of duties deposited as determined on such liquidation,"

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The regulation issued by the Secretary of the Treasury under the above mandatory requirement of "notice" is known as Customs Regulation 1943, 16.2 subsection (d) and provides as follows:

"Upon the return of entries to the collector after the assessment of duties and internal-revenue taxes has been verified by the comptroller, formal entries shall be immediately scheduled on a bulletin notice of liquidation, customs Form 4333. * * * The Bulletin notice of liquidation shall be posted as soon as possible in a conspicuous place in the customhouse for the information of importers or lodged at some other suitable place in the customhouse in such a manner that it can readily be located and consulted by all interested persons, who shall be directed to that place by a notice maintained in a conspicuous place in the customhouse stating where notices of liquidation of entries are to be found." [Italics ours.]

Sections 2621, 2622, and 2623 of the Revised Statutes (19 U. S. C. 33, 34, and 35), describes certain functions of collectors of customs. They require the

receiving of entries at "each of the ports"; the payment of duty there; the keeping of records there, and the delivery of merchandise there. All these functions are specifically abolished by section 3 (10) of Reorganization Plan No. 3 of 1952. The abolition is all-inclusive and no more such records need be kept. The result is to substitute the unfettered discretion of the Secretary of the Treasury for the definite statutory provisions making mandatory, on certain officers, the keeping and disclosure of the basic information necessary to implement the right of judicial review. Under this Plan No. 3 the Secretary may cause such records to be kept in Washington, or in certain headquarters ports, or not at all, and unless the record is conveniently located the right of judicial review is substantially denied. The Customs Courts have uniformly held that either 'the Government or the importer has the right to a court hearing at the port where the entry was made and where the records are kept.

This statutory right to indepedent judicial review is encompassed within the provisions of sections 514, 515, and 516 of the Tariff Act of 1930 (19 U. S. C. 1514, 1515, and 1516). Those sections contain in concentrated form the result of efforts since 1890 to create and perfect this independent judicial review.

Section 514 (19 U. S. C. 1514) provides as follows:

"All decisions of the collector, including the legality of all orders and findings entering into the same as to the rate and amount of duties chargeable, and as to all exactions of whatever character (within the jurisdiction of the Secretary of the Treasury) and his decisions excluding any merchandise from entry or delivery, under any provisions of the customs laws, and his liquidation or reliquidation of any entry, or refusal to pay any claim for drawback, or his refusal to reliquidate any entry for a clerical error discovered within one year after the date of entry, or within sixty days after liquidation or reliquidation when such liquidation or reliquidation is made more than ten months after the date * * * be final and conclusive * * * of entry, shall unless the importer, consignee, or agent of the person paying such charge within sixty days file a protest in writing with the collector, * setting forth the reasons for the objection thereto." [Italics ours.] Section 515 (19 U. S. C. 1515) providing as follows, gives to the collector of customs the right to review his own action, and to sustain any protest filed with him. This quasi judicial function is accompanied by the definite direction to forward the protest and papers to the United States Customs Court if the collector adheres to his original decision.

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"Upon the filing of such protest the collector shall within ninety days thereafter review his decision and may modify the same in whole or in part * If the collector shall upon review affirm his original decision or if a protest shall be filed against his modification of any decision then the collector shall forthwith transmit the entry and the accompanying papers and all the exhibits connected therewith to the United States Customs Court for due assignment and determination, as provided by law. Such determination shall be final and conclusive and the papers transmitted shall be returned with the decision and judgment order thereon to the collector who shall take action accordingly, except in cases in which an appeal shall be filed in the United States Court of Customs and Patent Appeals [Italics ours.]

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The American manufacturer, producer, or wholesaler was given the right, in the Tariff Act of 1930, to complain about the application of too low a valuation, or too low a rate of duty, and to file such a complaint with the Secretary of the Treasury who operated thereafter through the appraiser or the collector of customs. Protests against adverse action must be filed with the collector before going to the United States Customs Court.

Section 516, Tariff Act of 1930 (19 U. S. C. 1516) provides sustantially as follows:

(a) That whenever an American manufacturer, or a producer, or wholesaler, believes the appraisement of competitive merchandise is too low he may file a complaint with the Secretary of the Treasury who shall transmit a copy thereof to the appraiser at each interested port, and the appraiser shall report each subsequent importation with the entry number, the name of the manufacturer, the appraised value, and his reasons. If the Secretary does not agree with the appraiser, "he shall instruct the collector to file an appeal" as provided in 19 U. S. Code sec. 1501, and the American manufacturer "shall have the right to appear and be heard as a party in interest". If the American manufacturer is not satisfied with the action of the Secretary and the appraiser he may within 30 days "file an appeal for reappraisement in the same manner as an appeal by a consignee under the provisions of 1501".

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(b) Where an American manufacturer disputes the classification of any merchandise he may file a complaint with the Secretary of the Treasury who may decide which rate of duty is correct, and shall "notify the collectors." If the Secretary differs with the American manufacturer he "shall direct the collector at such port to notify the manufacturer immediately upon the liquidation of the first of such entries to be liquidated. "Such manufacturer, producer, or wholesaler may file within thirty days after the date of such liquidation with the collector of such port a protest in writing 46* * * A copy of every appeal and every protest filed by an American manufacturer under the provisions of this section * * * shall be mailed by the collector to the consignee or his agent * * * and such consignee, or his agent, shall have the right to appear and be heard as a party in interest before the United States Customs Court. The collector shall transmit the entry and all papers and exhibits accompanying or connected therewith to the United States Customs Court for due assignment or determination

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These statutes spell out in detail the right to appeal. Congress has seen fit to designate a certain officer (the collector), and the duties of such officer in connection with the granting of this very substantial right, and to define his functions in connection with these appeals. It would seem that if the collector or the appraiser is abolished a strict compliance with the technical requirements of the above sections becomes impossible. These are not, strictly speaking, functions of the collector, but are ministerial duties delegated to him to implement the grant of the right to sue the United States. They were not given to any other person, or to any other office except the one in existence at the time of the passage of the Tariff Act of 1930, and a grave question arises as to whether the right to judicial review expires with the abolition of the vehicle through which that right was perfected.

Obviously, where there is no notice of official action no timely appeal or protest can be filed with the collector. If in turn the functions of the office of collector are distributed or transferred to some now unknown authority, it is extremely doubtful whether any phraseology used in connection with the new office or the distributed functions with apply to the specific requirements of the Customs Administrative Act. If, for example, the collector is abolished and another officer called Examiner or Commissioner is put in his place there will remain no statutory requirement that such Examiner or Commissioner must post notices of appraisement and liquidation, and receive and consider and forward protests against classifications.

We are not unmindful of the fact that section 401 (h) of the Tariff Act of 1930 provides as follows:

"The word 'collector' means collector of customs and includes assistant collector of customs, deputy collector of customs and any person authorized by law or by regulation of the Secretary of the Treasury to perform the duties of a Collector of Customs."

nor that section 401 (j) provides as follows:

"The word 'appraiser' means appraiser of merchandise and includes chief assistant appraiser and any person authorized by law or by regulations of the Secretary of the Treasury to perform the duties of appraiser but does not include the United States Customs Court or any division or judge thereof." Those provisions apply to the office known as the office of the collector or appraiser and to the incumbents known as the collector or appraiser. Plan No. 3 abolishes these officers and offices, and also specifically removes some of the duties recognized in 1930 as necessary to the completion of a plan for judicial review. Undoubtedly these two provisions were intended to permit the necessary appointment of someone to collect the duties and make appraisals when the official collector or appraiser was unable to act although the office of collector and the office of appraiser was still in existence.

Under plan No. 3 these offices and officers are abolished and some of their duties are specifically abolished, and others, in a blanket form, transferred to the Secretary of the Treasury or his delegatees whoever they may be, and no expressed intention by the present personnel of the Bureau of Customs or the Treasury Department can bind any future personnel.

The statement in the transmittal message of the President

66* * * that abolition by Reorganization Plan No. 3 of 1952 of the offices of collector of customs, comptroller of customs, surveyor of customs, and appraiser of merchandise will in no way prejudice any right or potential right of any person paying duties or imposts. The abolition of offices by Reorganization Plan No. 3 of 1952 will not abolish any rights, privileges, powers, duties, immu

nities, liabilities, obligations, or other attributes of those offices except as they relate to matters of appointment, tenure, and compensation inconsistent with that reorganization plan.

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is, in our opinion, clearly erroneous. The plan itself contains some specific abolitions which affect the rights and the potential rights of persons paying duties. In any event, the promise of the President, or the promise of the Bureau of Customs that certain things will or will not be done under an uncontrolled discretionary power granted to the Secretary of the Treasury is a very poor substitute for a Congressional spelling out of a right to sue the United States. Plan No. 3 as now submitted if not disapproved will become the law of the land and such law will probably override the Tariff Act of June 17, 1930.

It has been stated that all of the difficulties hereinbefore set forth are cured by the statement in section 1 of the plan No. 3, that

"Except as to the functions abolished by this plan, the functions of the said officers shall be assigned to such civil-service positions as the Secretary of the Treasury may specify."

The Secretary has, under the plan, the uncontrolled power to distribute or assign to any number of civil-service positions the functions of any one of these customs officers. It thus becomes very simple for the Secretary to make it impossible for importers or their representatives to either obtain the basic facts upon which the judicial review is founded or to obtain the judicial review itself. This would happen were the Secretary to choose one central port for all liquidations; or several ports for the posting of notices of official action; or the requirement of transmittal of all complaints to a central administrative center for review. Any of these things would of itself destroy the orderly conduct of judicial review as created by Congress and approved by the courts, to say nothing of the great body of customs law built up by the constitutional and legislative Federal courts over the past 60 years. More than 10,000 importing houses throughout the United States are represented by members of this association, and a guaranty of the continuance of independent judicial reviews is vital to their interests.

For these reasons, and because we think there is at least a very substantial doubt as to the effect of the submitted "plan," it is suggested that the plan be disapproved unless it contain some specific provision about as follows:

"Provided, That nothing contained in Reorganization Plan 26 of 1950 or Reorganization Plan No. 3 of 1952, or in any other plan, or in any rule, or regulation made in connection therewith, shall impair, deprive, alter, or curtail the rights which importers, consignees, agents of the person paying such duties, charges, or exactions, or any American producer, manufacturer, or wholesaler, had on May 1, 1949, to notice of appraisement action and of liquidation, and to complete independent judicial review by the United States Customs Court and the United States Court of Customs and Patent Appeals of any questions arising out of the administration of customs laws existing on that date."

APPENDIX A

MEMORANDUM ON EFFECT OF REORGANIZATION PLAN No. 3 UPON JURISDICTION OF UNITED STATES CUSTOMS COURT AND JUDICIAL REVIEW IN RESPECT TO CUSTOMS MATTERS

This memorandum is concerned solely with (1) questions and problems which may impair, curtail, or restrict the jurisdiction of the United States Customs Court and its subject matter, and (2) the preservation of the judicial review to which all importers, consignees, agents, or attorneys have been entitled since the enactment of tariff laws.

Reorganization Plan No. 3, filed April 9, 1952, in effect abolishes the existing statutory administrative structure and organization, and gives the Secretary of the Treasury broad powers to create a new administrative organization deriving its powers to create a new administrative organization deriving its powers from him rather than from the statutes. Specifically, Reorganization Plan No. 3 abolishes the offices of Collector of Customs, Comptroller of Customs, Surveyor of Customs and Appraiser of Merchandise, whose functions, duties, and powers are presently described and enumerated in various sections of title 19 of the United States Code.

In general, the cases and controversies which constitute the subject matter of the Customs Court's jurisdiction arise because of (1) protests against the decisions of Collectors of Customs at the various ports throughout the United States (19 U. S. C. § 1514; 28 U. S. C. § 1583); and (2) appeals from the appraisement and findings of value made by various Appraisers of Merchandise throughout the country (19 U. S. C. § 1501; 28 U. S. C. §§ 1582, 2631). In view of the fact that the Customs Court acquires the subject matter of its jurisdiction by virtue of protests against decisions of Collectors of Customs and appeals from appraisements and findings of value of appraisers, and in view of the abolition of the offices of collector of customs and appraiser of merchandise by Reorganization Plan No. 3, the question may well arise whether the decision of the person (not yet named, whose functions have not been assigned, and who might bear another title) who succeeds to the functions of those officers upon Reorganization Plan No. 3 taking effect, would likewise be subject to judicial review by the Customs Court.

Whereas other reorganization plans might not have directly involved the jurisdiction of the various Federal courts, it is submitted that Reorganization Plan No. 3 impinges directly upon the very source of the Customs Court's juris-dictional subject matter by abolishing the offices of Collectors of Customs and Appraisers of Merchandise without including within the plan itself a provision which would preserve judicial review of all future causes of action or claims, suits, actions, or proceedings arising or which might arise from the decisions of the holders or occupants of the new offices established or to be established under section 2 of Reorganization Plan No. 3, and to which offices or officers various functions, duties, and powers of the present collectors of customs, appraisers, and other named customs officers might be transferred or assigned by the Secretary.

If the presently existing Reorganization Plan No. 3 should take effect on June 9 or 20, 1952, then a hiatus or gap might result in respect to the subject matter of the Customs Court's jurisdiction, confusion might result, and serious and irreparable injury and damage to importers and others might ensue. At any given moment, thousands of entries of merchandise already imported are in various stages of administrative processing in the offices of the Appraisers and the Collectors of Customs, the customs laws providing for an administrative handling which requires all merchandise to be first appraised by the Appraiser and a report filed by that officer with the collector, and then classified by the Collector of Customs. The customs laws also give the collector 90 days within which to review his own decision after protest is filed. The jurisdiction of the Customs Court attachés after the expiration of the 90-day period of review given the Collector of Customs.

In connection with the matter of appraisement, there are not only the normal delays before imported merchandise is actually appraised by the appraiser, but there is the custom or practice of "withholding appraisement" pending receipt of additional information and also pending the handing down of decisions on : similar situations by the Customs Court and the Court of Customs and Patent Appeals, and even by the Supreme Court of the United States. Normally there are thousands of "withheld appraisements."

There is no provision or clause or paragraph in Reorganization Plan No. 3 itself which would remove the doubts and uncertainties as to the Customs Court's jurisdictional subject matter and preserve the historic judicial review which importers have always enjoyed. Apparently, the Reorganization Act of 1949, pursuant to which Reorganization Plan No. 3 is submitted and filed, does not contain a saving clause which would confirm and assure the Customs Court's jurisdiction over its present subject matter and the importers their right of judicial review.

Section 133z-7 (b) of title 5, United States Code (sec. 9, ch. 226, Public Law 109, 63 Stat. 206, Reorganization Act of 1949) contains nothing which saves claims or causes of action arising before, but not reduced to suit, action, or proceeding, the taking effect of Reorganization Plan No. 3; nor does it save any claims or causes of action arising after the reorganization plan takes effect. The provision just mentioned seemingly saves nothing except suits, actions, or other proceedings lawfully commenced (and filed in proper place) by or against the head of any agency or other officer of the United States at the time the reorganization plan takes effect. This paragraph saves only pending suits, actions, or proceedings if (a) within 12 months the party litigant files a motion : showing the necessity of survival and (b) the court allows the pending suit,