Best Foods, Inc. v. United States

dissenting opinion

Richardson, Judge:

The Court of Customs and Patent Appeals, in the case of United States v. The Best Foods, Inc., 47 CCPA 163, C.A.D. 751, having decided that the President did not have the power under the statute, 7 U.S.C.A., section 624 (b) and (c) (sec. 22 (b) and (c) of the Agricultural Adjustment Act), to impose both a quota and a fee in proclamation No. 3084, permitting the entry of additional quantities of peanuts, did not reach several other issues ruled upon by the third division of the United States Customs Court in The Best Foods, Inc. v. United States, 42 Cust. Ct. 310, Abstract 62865. These *110unresolved issues, which have also been raised in this case with respect to proclamation 3095, are:

(1) The adequacy of notice of an investigation to determine whether an existing Presidential proclamation should be modified.

(2) The proper compliance with procedural requirements of section 22 of the Agricultural Adjustment Act, as amended, before issuance of a Presidential proclamation, pursuant to the act, and

(3) Whether the imposition of a fee is a proper modification of an existing proclamation which provides only for a quota.

With respect to these three issues, I reaffirm my views expressed in the dissenting opinion in The Best Foods, Inc. v. United States, Abstract 62865, 42 Cust. Ct. 310, 316.

(1) The plaintiff contends that the fee provision of the proclamation of May 16,1955, is void, in that the notice of supplemental investigation and public hearing issued by the Tariff Commission on April 1, 1955, and published April 5,1955, 20 F.E. 2143, did not mention that imposition of a fee would be considered, citing the case of Carl Zeiss, Inc. v. United States, 23 CCPA 7, T.D. 47654; 76 F. (2d) 412.

The subject of the imposition of fees developed at the hearings and was deemed necessary by the Tariff Commission to effectuate the purposes of section 22, one of which was to avoid interference with the peanut program of the Department of Agriculture. To say that since the public notice did not state that fees were to be considered as a condition to be imposed upon entering or withdrawing imported peanuts from a warehouse for consumption, the Tariff Commission could not consider fees, is to say that the Tariff Commissioners must first determine whether a quota or fee is feasible before they conduct their investigation, which ostensibly is to aid them in determining this matter. The Zeiss case is distinguishable from the case at bar. In the Zeiss case, the Tariff Commission was limited to the consideration of particular merchandise by a specific directive to the Commission contained in Senate Resolution 227, see Congressional Record, volume 75, part II, page 12550, to investigate “the differences in the cost of production between the domestic articles and the foreign articles, and to report, at the earliest practicable date, upon the following articles:

2. Optical instruments of a class or type used 'by tbe Army, Navy, or Air Force for fire control and parts thereof.” [Emphasis added.];

The complainant received the notice of the Tariff Commission and did not attend the hearing, because it was not interested in the merchandise scheduled for consideration according to the notice. However, the Commission considered merchandise different from that in its notice and merchandise that complainant was interested in. In this case, the merchandise considered at the hearing by the Tariff Commission was the merchandise described in the Commission’s notice *111which the complainant received and it was present and participated in the hearing through its Mr. A. S. Yohalem. Also, the notice set forth the substance of Presidential Proclamation No. 3019, which imposed a quota, and of Supplemental Proclamation No. 3084, which raised the quota and imposed an additional import fee of % cents per pou/nd.

The fact that the complainant was present and participated in the hearings before the Tariff Commission, through its representative, without his making timely objection at the administrative level that the notice of the hearing was insufficient or inadequate, is, in effect, a waiver of its right to rely upon an alleged procedural irregularity. United States v. Elof Hansson, Inc., 48 CCPA 91, C.A.D. 771; certiorari denied, Elof Hansson, Inc. v. United States, 368 U.S. 899; United States v. Tucker Truck Lines, 344 U.S. 33.

(2) The procedure followed by the President in issuing proclamation 3095 was in compliance with the authority conferred upon him by section 22 of the Agricultural Adjustment Act, as amended. The act does not require that the Tariff Commission or the President make an express finding as to parity. The President, on the basis of the finding and recommendation of the Tariff Commission, found that “the admission of such additional quantity of peanuts . . . subject to the fee hereinafter proclaimed is necessary in order that the entry of such peanuts will not render or tend to render ineffective, or materially interfere with the said [domestic] program of the Department of Agriculture with respect to peanuts, or reduce substantially the amount of any product processed in the United States from peanuts with respect to which such program is being undertaken . . . .” [Emphasis added.] This language from the President’s finding is almost verbatim with that found in section 22 and is sufficient to embrace a determination that the price of peanuts would not be maintained above parity level, as parity is a part of the domestic program of the Department of Agriculture. It is immaterial whether the President used the above-quoted language of his finding expressed in his proclamation or whether he expressed his finding in the language which the majority opinion feels was required before proclaiming a fee — that is, that “the importations of shelled peanuts [are] such as to threaten, or as likely to threaten, the price support program of the Agricultural Adjustment Act, directly or by limiting domestic processing of the price supported commodity.” Either language would constitute compliance with the requirements of the statute as to the necessary findings by the President at the time of the issuance of his proclamation modifying his earlier proclamation, by eliminating a quota and imposing a fee. The President is not required to use any special combination of words or fixed verbal formula to indicate his finding, as long as he uses language that will meet the policy of Con-. *112gress expressed in. the statute. Also, there is nothing before the court to indicate the “purpose” of the proclamation was to maintain prices to farmers above the level declared to be the policy of Congress.

This court may not go behind the report of the findings of an administrative agency (the Tariff Commission or the President).

An investigation is a prerequisite to the issuance of a proclamation by the President. William A. Foster & Co. v. United States, 20 C.C.P.A. (Customs) 16, T.D. 45673. However, when it is once established that such an investigation has been had, it is not within the power of this court to go behind the report and findings of the commission and to determine whether, in fact, the proceedings of the commission, and the evidence heard before it, was sufficient to justify the findings and conclusions arrived at. (Union Fork & Hoe Co. v. United States, 24 CCPA 199, 205, T.D. 48656. See also, Westergaard Berg-Johnsen Co. v. United States, 27 CCPA 207, 216, C.A.D. 86.]

(3) The majority is of the opinion that the word “modify” connotes a limitation of that which is modified and that the President, under the authority given him by section 22(d) of the Agricultural Adjustment Act, could not “modify” a proclamation fixing a quota by eliminating the quota and imposing a fee.

In view of the various judicial definitions indicating the contrary, I do not feel that the word “modify” necessarily connotes a limitation. The term is said to have many meanings and is to be interpreted “in the light of the context in which it is used.” (58 O.J.S. 840.) It is true that the lexicographers, in some instances, define modify as meaning to reduce rather than to increase the thing modified, but the cases are numerous in which the courts, in interpreting the term, have not adhered to this restrictive meaning. A few citations will serve to illustrate the point.

In the case of Jarman v. Collins-Hill Lumber & Coal Co., 286 N.W. 526, 226 Iowa 1247, the power given to a commissioner to modify a workmen’s compensation award was said to be “the power to change, the power to i/ncrease as well as reduce, the arbitration award.” [Emphasis supplied.] Statutory authority of a district court to modify tax assessments on appeal, was held to authorize the court to increase as well as decrease the assessment, although statutory notice was not given in McGoldrich Lumber Co. v. Benewah County et al., 35 P. (2d) 659. In Evans v. Henson, 37 S.E. (2d) 164, 73 Ga. App. 494, an addition of sweetened, condensed milk to other items which plaintiff was allowed to sell under provisions of a written contract to serve as salesman for defendant, for which plaintiff was to receive a commission of only 3 per centum, together with addition of other territory to that specified in a written contract in which plaintiff was allowed to sell goods and receive commissions on his sales therein, was held effective as a “modification” of the written contract. In Black’s Law Dictionary, 4th edition, the word “modification” is defined as “a change; an alteration which introduces new elements into the details, *113or cancels some of them, but leaves the general purpose and effect of the sub ject-matter intact.” And the meaning given the word “modify” in the same dictionary, is “to alter; to change in incidental or subordinate features; enlarge, extend; limit, reduce.” Accord, In Re Independent Consol. School Dist. No. 16, 63 N.W. (2d) 543. The court, in The Best Foods, Inc., case, supra, quoted from Webster’s New International Dictionary, second edition, as follows:

Modify * * * 2. To reduce in extent or degree; to moderate; qualify; lower; as, to modify lieat, pain, punishment. * * * 4. To change somewhat the form or qualities of; to alter somewhat; as, to modify the terms of a contract. * * * [Emphasis supplied, except for word “modify.”]

In the Evans v. Henson case, supra, a sales contract was modified by adding thereto an entirely new product and additional territory. Thus, it appears that even the lexicographic definition above quoted is broad enough to embrace the introduction of new elements into the thing being modified, since it uses the modification of a contract as an example to illustrate the definition given.

In the case of State Airlines, Inc. v. Civil Aeronautics Board, 174 F. (2d) 510 (reversed in Civil Aeronautics Board v. State Airlines, Inc., 338 U.S. 572), cited in The Best Foods, Inc., case, supra, the United States Court of Appeals for the District of Columbia, in a two-to-one decision, reversed an order of the Civil Aeronautics Board awarding to Piedmont Aviation, Inc., a certificate of convenience and necessity to engage in air transportation along routes which were said to have differed greatly from those sought by Piedmont. In applying for the routes, the applicant inserted in its application a so-called “catch-all clause” seeking the authority to transport along “the routes detailed herein, or such modification of such routes as the Board may find public convenience and necessity require.” The Civil Aeronautics Act empowered the board to issue certificates “authorizing the whole or any part of the transportation covered by the application, if it finds that the applicant is fit, willing, and able to perform such transportation properly.” The United States Supreme Court, in Civil Aeronautics Board v. State Airlines, supra, said, “The Court of Appeals read this language as showing a congressional purpose to bar the Board from granting any certificates in which the routes awarded deviate more than slightly from the precise routes defined in the application.” In the light of this interpretation of the statutory provision, the Court of Appeals viewed the application filed by Piedmont and the routes awarded to it by the board, and, since the latter deviated greatly from the routes specifically requested by the applicant, concluded that Piedmont had not applied for the routes awarded or, in other words, that Piedmont’s application did not cover the routes awarded to it. It seems apparent that the meaning of slight alteration, *114toning down, and limiting, given to the term “modification” by the Court of Appeals, in applying the term to the action of the board, was directly influenced by its interpretation of the language of the statute set out above. The only authorities relied on by the Court of Appeals for the restrictive meaning attributed to the term were a definition from volume VI of the Oxford English Dictionary (1938 edition) , and a judicial interpretation of the word “modify,” as it was used in connection with certain divorce proceedings in the case of Linn v. Linn, 242 Ala. 688, 8 So. (2d) 187. In the Linn case, the Supreme Court of Alabama, acting Tinder a statute authorizing an appeal from an order modifying a divorce decree, dismissed the appeal where the lower court had set aside the divorce decree. It must be assumed that the Court of Appeals was familiar with the various judicial constructions placed upon the terms “modify” and “modification” and that the definition adopted was selected because it accorded with the interpretation that the court felt the factual situation of the case required, a situation entirely different from that in the instant case.

Although the Supreme Court, in reversing the Court of Appeals, did not discuss the meaning of the term “modification,” it stated, in its opinion, at page 575, “We hold that Piedmont’s applications were sufficient to permit certification of Piedmont for the routes awarded,” and this statement, in our opinion, appears to negative, if indirectly, the finding of the Court of Appeals that the routes awarded Piedmont could not be considered a modification of the routes sought.

In the light of the foregoing cases and the many other cases defining “modify” and “modification,” the interpretation given the term “modify” in The Best Foods, Inc. v. United States, supra, is not required. The President could modify his proclamation within the four comers of section 22 (d) and the part of section 22 (b) which it incorporates by reference (7 U.S.C. § 624(d)), and this included the imposition of a fee provided for in the section, even though the imposition of the fee was the addition of a new element. The imposition of a fee changed the mode in which the subject of proclamation 3019 (importation of peanuts) was dealt with, but did not change the subject itself, and this, too, has been said to constitute a modification. (58 C.J.S. 840.) Therefore, I am of the opinion that the term “modify” is broad enough to embrace the imposition of a fee in the modifying proclamation, where only a quota had been proclaimed in the original proclamation. In modifying his original proclamation, the President could impose any condition which was open to him when he issued the original proclamation.

The Tariff Commission recommended that shelled peanuts be permitted to be entered, or withdrawn from warehouse, for consumption “unrestricted by quota,” but subject to a fee of 2 cents per pound *115(plaintiff’s exhibit C). Following this recommendation, the proclamation permits “an wnlimiiecl [italics supplied] additional quantity of peanuts, shelled ... to be entered, or withdrawn from warehouse, for consumption on or before July 31,1955, subject to a fee of 2 cents per pound, but not more than 50 per centum ad valorem . . . .” Since the proclamation applied the fee to the period May 19, 1955, to July 31, 1955, the plaintiff contends the establishment of a terminal date amounted to the imposition of a quantitative restriction. If we accept this contention, then, all proclamations imposing a fee must contain an open end to be legal. The terminal date when entries or withdrawals may be made in any proclamation must necessarily, to some degree, influence the amount of the merchandise to be imported, but this should not be interpreted as constituting the imposition of a quota or tantamount to a definite limitation of amount.