On Independence Day 2024 Cone Trade Law Celebrates SCOTUS Overturning Chevron Thereby Restoring Independent Authority To The Judicial Branch

Cone Trade Law Celebrates SCOTUS Overturning Chevron Thereby Restoring Independent Authority In The Judicial Branch To Say What The Law Is (And Vindicating The Solomonic Judgment Of The Late U.S. Court Of International Trade Judge R. Kenton Musgrave In The Process)

Over 20 years ago the U.S. Supreme Court vacated and remanded a federal appellate court’s affirmance of a decision issued by the late Honorable R. Kenton Musgrave of the U.S. Court of International Trade, who had temeritously declined to extend Chevron deference to an interpretive decision by U.S. Customs.

Upon turnkey remand from the appellate court, Judge Musgrave ate the sour sandwich in proper and due respect for higher authority, yet in fealty to his sworn oath upon taking office to uphold the Constitution felt compelled to issue the expressly reluctant decision in Levi Strauss & Co. v. United States set forth in full below (which at the time of this writing has yet to be cited by any other court).

My 1995-1997 clerkship with Judge Musgrave ended long before the issuance of these decisions so I speak completely as an outside observer in remarking how his reasoning in Levi Strauss – commencing as it does with Marbury v. Madison and ending with Article III of the Constitution – is astonishingly congruent with last week’s long overdue repudiation of Chevron pursuant to a thorough and well-reasoned decision authored by Chief Justice Roberts in a case captioned Loper v. Raimondo. See https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf.

Having enjoyed the extraordinary privilege of serving a unique legal titan in chambers as a judicial law clerk, what I do feel free to share as a former inside observer is that Judge Musgrave was confident in his scintillating intelligence and hard-earned judgment, and deeply cared about his legacy. While some judges may claim to brush off reversals from the higher authority of appellate courts including SCOTUS, in my experience it was not something Judge Musgrave got too terribly excited about.

So although the effective reversal by SCOTUS in Levi Strauss presumably carried a sting, Judge Musgrave’s previously cast-aside Solomonic wisdom in that case has just been squarely vindicated and enshrined for the ages by SCOTUS in its Loper decision.

And make no mistake about it: the U.S. Court of International Trade just got its Mojo back along with every other federal court in the country.

The good Judge Musgrave passed away last year at the ripe old age of 95 just one year shy of witnessing his SCOTUS record move from 1-1 to 2-0 in his own lifetime (in U.S. Shoe v. United States Judge Musgrave joined the decision of two other judges on the court in a decision which SCOTUS upheld, thereby overturning the Harbor Maintenance Tax on exports and eventually resulting in upwards of $1 billion in refunds on exactions held to violate the Constitution’s Export Clause).

With the advent of last week’s Loper decision overruling Chevron, by logical entailment it’s fair to say Judge Musgrave’s SCOTUS record is now posthumously settled at 2-0: and the country, its independent federal judiciary, and private citizens petitioning federal courts for wise judgment and equal treatment before the law are now far better off for it.

In the meantime, Judge Musgrave will be sorely missed and the federal bench has lost one of its most clairvoyant and independent lights.

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Levi Strauss & Co. v. United States, United States Court of International Trade, March 5, 2001. Court No. 93-11-00726, Reporter 25 C.I.T. 166 ; 133 F. Supp. 2d 693 *; 2001 Ct. Intl. Trade LEXIS 17 ***; 23 Int'l Trade Rep. (BNA) 1190; SLIP OP. 2001-25

LEVI STRAUSS & COMPANY, Plaintiff, v. UNITED STATES, Defendant.

Opinion by: R. KENTON MUSGRAVE

OPINION AND JUDGMENT

In Marbury v. Madison, Chief Justice Marshall stated that "it is emphatically the province and duty of the judicial department to say what the law is", 5 U.S. (1 Cranch) 137, 177, 2 L. Ed. 60 (1803) (emphasis added), a position generally accepted by the bar and the judiciary for the past one hundred ninety-eight years. This proposition was significantly limited, if not partially overruled, by the Supreme Court's decision in Chevron U.S.A., Inc. v.bNatural Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984), which was recently reaffirmed in United States v. Haggar Apparel Co., 526 U.S. 380, 143 L. Ed. 2d 480, 119 S. Ct. 1392 (1999), holding that the law may be -- and indeed is mandated to be -- the interpretation by the agency administering the particular law or regulation.

In Chevron, the Supreme Court directed the judiciary to give deference to an agency's reading of its own regulation:

"The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." Morton v. Ruiz, 415 U.S. 199, 231, 39 L. Ed. 2d 270, 94 S. Ct. 1055 (1974). If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency."

467 U.S. at 843-44 (footnotes omitted) (emphasis added). FN1 Thus an agency employee, who may have little or no background in the law, is now both the enforcer and interpreter of the law.

This result compromises the long established concept of judicial review. Even in instances where the statute is silent or ambiguous and there has been no explicit legislative delegation from Congress to the agency, courts must still defer to the agency's interpretation. See Chevron, 467 U.S. at 843-44, quoted supra. At best, this mandate supplants the opinion a member of the federal judiciary, appointed by the President, with the advice and consent of the Senate, with that of an executive branch employee; at worst, it amounts, in essence, to the delegation of the authority of the judicial branch to the executive branch. Article III, Section 1 of the Constitution provides that "the judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." To the extent that judicial power entails the power to "say what the law is", Chevron and its progeny erode this clause.

While the complexion of American society has changed dramatically since 1787, it nonetheless boggles the rational thought process to imagine that the Framers could possibly have contemplated empowering vast agencies with authority to interpret the very laws which they administer. Citizens and corporate entities are now at the mercy of federal regulators, who are by nature and purpose often adversaries of those whom they regulate. To say that judicial review of administrative decisions is alive and well is to deny reality. In practice the opinions and orders of administrators and their subalterns are almost always final.

Irrespective of the foregoing, this Court is constrained to follow the precedent of the Supreme Court and the Court of Appeals for the Federal Circuit. In Levi Strauss & Co. v. United States, 21 C.I.T. 677, 969 F. Supp. 75 (1997) this Court entered judgment for the plaintiff, holding that the merchandise at issue was properly classified under HTSUS 9802.00.80. See 21 C.I.T. at 685, 969 F. Supp. at 82. That decision was affirmed by the Court of Appeals for the Federal Circuit. See Levi Strauss & Co. v. United States, 156 F.3d 1345, 1350- 51 (Fed. Cir. 1998). Subsequently the Supreme Court vacated and remanded the Federal Circuit's decision. See United States v. Levi Strauss & Co., 527 U.S. 1001, 144 L. Ed. 2d 233, 119 S. Ct. 2335 (2000). On remand, the Federal Circuit held that

"Customs' determination that the articles do not qualify for the partial exemption from duty allowed by HTSUS 9802.00.80 must be sustained. The Court of International Trade's judgment to the contrary is accordingly reversed, and we remand the case with instructions to enter judgment in favor of the United States." Levi Strauss & Co. v. United States, 222 F.3d 1344, 1347 (Fed. Cir. 2000).

Accordingly, it is hereby

ORDERED that the Court's prior entry of judgment in favor of Levi Strauss & Co. is withdrawn, and it is further

ORDERED that the United States Customs Service's determination that the apparel at issue does not qualify for the partial exception from duty allowed by HTSUS 9802.00.80 is sustained.

R. KENTON MUSGRAVE, JUDGE

Date: March 5, 2001, New York, New York

1 The Federal Circuit Court of Appeals has further curtailed the authority of this Court in antidumping cases by holding that Commerce is entitled to "tremendous deference . . . in administering the antidumping law", Melamine Chemicals, Inc. v. United States, 732 F.2d 924, 930 (Fed. Cir. 1984) (Markey, C.J.) (quoting Smith-Corona Group v. United States,713 F.2d 1568, 1582 (Fed. Cir. 1983)), and further that "the International Trade Administration is the 'master' of the antidumping laws", Fujitsu General Ltd. v. United States, 88 F.3d 1034, 1038 (Fed. Cir. 1996) (quoting Torrington Co. v. United States, 68 F.3d 1347, 1351 (Fed. Cir. 1995)).