United States v. Mersky

PETITIONER:United States
RESPONDENT:Mersky
LOCATION:Dry Docks at Reed, WV

DOCKET NO.: 31
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 361 US 431 (1960)
ARGUED: Nov 10, 1959
DECIDED: Feb 23, 1960

Facts of the case

Question

Audio Transcription for Oral Argument – November 10, 1959 in United States v. Mersky

Earl Warren:

Number 31, United States of America, Appellant, versus Bernard Mersky, et al.

Mr. Grimm, you may proceed.

Eugene L. Grimm:

Thank you Mr. Chief Justice and may it please the Court.

This case presents an undecided question as to the interpretation of the Criminal Appeals Act, 18 U.S.C. 3731, regarding jurisdiction over the appeal.

If the merits are reached, the question is one of the constructions to be place upon certain customs regulations published by the Treasury Department.

In this case, appellees were charge by information with violating 19 U.S.C. 1304 which requires that articles imported from foreign land be marked with their country of origin and that such marking be maintained until sale of the article to ultimate purchaser.

The District Court dismissed the information on the ground that a Treasury Decision requiring that articles imported from East Germany be marked “Germany Soviet occupied” do not require such making for the purposes of 1304, that is the marking statute.

On Appeal by the Government, the Court of Appeals concluded that the appeal should have been taken to this Court in the first instance since it regarded the construction of the administrative regulation as the construction of a statute within the meaning of Criminal Appeals Act and concluded that in any event, the order sustaining the motion to dismiss was an order sustaining a motion in bar.

It therefore certified the case to this Court.

The Government thinks this case was properly appealed to the Court of Appeal in the first instance.

Cases of course coming here by certificate are fairly unusual.

If I may go rather quickly over the operative facts, the information in this case alleged that between August 1956 and March 1957, the appellees had purchase a certain violins from importers.

Now, at the time they purchased these violins, the violins had been imported from East Germany and they bore label showing that they had been imported from Germany, Soviet occupied or U.S.S.R. occupied.

It was the allegation in the information that the appellees had obliterated and removed these labels and there after sold the violins to someone who was not an ultimate purchaser without disclosing the fact that they have been imported from East Germany and of course, there was a theory of this information that this act on the part of the appellees intentionally done was a violation of the marking statute.

Now, the statute itself requires that every article of foreign origin be marked with the name of the country of origin and the country of origin, that phrase has been defined by appropriate regulation as political entity known as a nation.

Here, let me say of course that the marking statute provides that the Secretary of Treasury may issue regulations establishing just what marking maybe put on various imported articles to indicate specific country from which it came.

So, as I said at the first regulation which is our concern here, defines country of origin as a political entity known as a nation.

Immediately or shortly after World War II in 1946, the Treasury Department permitted articles manufactured in all four zones of Germany to be marked as “made in Germany.”

And this regulation further provided that the specific zone of manufacture could be indicated if thought desirable by the importer.

Felix Frankfurter:

May I ask whether —

Eugene L. Grimm:

Yes, sir.

Felix Frankfurter:

— whether the Government construes — construed out order of bringing this case here, following for the consideration here on the merits.

You ask us to (Inaudible), the Court Appealed that discloses this thing on a — jurisdictional question to which you refer?

Eugene L. Grimm:

That’s right, Your Honor.

Felix Frankfurter:

What I want to know is why, assuming jurisdiction point, goes to you want this Court to pass on to substantive issue.

Eugene L. Grimm:

We do not —

Felix Frankfurter:

Is it because we postponed the jurisdictional question to the hearing of the case on the merit and the Government thought that meant that we will consider the merit?

Eugene L. Grimm:

Oh, no Your Honor, oh, no.

It simply that the — as we say in regard to the questions presented, we first set out — what we regarded to be the question on the issue of jurisdiction and we —

Felix Frankfurter:

And I suppose — I suppose that disposed of —

Eugene L. Grimm:

Well, if we succeed — if we succeed there.

Felix Frankfurter:

I want to know why the Government thinks as it’s evident there that we should decide the merits of that and having been note decision below on that?

Eugene L. Grimm:

Well, Sir, then I have — I have misled you, Your Honor because we do not expect you to pass upon the merits.

Felix Frankfurter:

You do not —

Eugene L. Grimm:

— if we prevail upon the jurisdictional issue.

Felix Frankfurter:

Yes.

Eugene L. Grimm:

But if — if you — if we lose on the jurisdictional issue, then, this Court will have to pass on the merit.

In other words —

Felix Frankfurter:

— you argue — that’s why you ask?

Eugene L. Grimm:

Yes, sir.

Felix Frankfurter:

But then you — I want to know in case we’re with you on the — the case — Court of Appeals was wrong on the jurisdictional question.

Eugene L. Grimm:

Yes, sir.

Felix Frankfurter:

Then, is the Government position that we should — we should send the case back or dispose of the merits here as we could jurisdictionally, couldn’t we?

Eugene L. Grimm:

That’s right, Your Honor.

Felix Frankfurter:

Now, what is the Government’s position on that?

Eugene L. Grimm:

Well, the Government’s position is that, under the literal language of Criminal Appeals Act, the case should properly be disposed of by returning it to the Court of Appeals for the decision on the merit.

Felix Frankfurter:

Yes (Inaudible) I just wonder what’s that the Government position.

Eugene L. Grimm:

Yes, sir.

As we — as we say in simply setting out the questions presented if the Court should hold that appeal is properly before it the question presented are.

To a — right now — right now, I’m stating these facts touching upon the merits primarily to direct the Court’s attention to the fact that the District Court in disposing of this information construed only the regulation, only the administrative regulation.

And so, to pass to the Treasury Regulation of 1953, that regulation in it’s title stated that — that it was intended to deal with Tariff status, customs evaluation and marking to indicate the country of origin.

And the first paragraph dealt with Tariff status.

The second paragraph began for the purposes of value provisions of Section 402 which is a customs provision within the Tariff Act.

And the third paragraph simply provided that articles made in Western Germany shall continue to be marked to indicate Germany as the country of origin, but that goods from Eastern Germany shall be marked to indicate Germany Soviet occupied as a country of origin.

Now, on dismissing the information that this —

William J. Brennan, Jr.:

Mr. Grimm before you that regulation, may I ask you?

I notice from the bottom of page 7 that this regulation was filed with division of Federal Register (Inaudible) anywhere in the brief indicate where it was published it, it doesn’t have to be published (Inaudible)

Eugene L. Grimm:

Well, sir, treasury — Treasury Decisions are published separately in bound volumes.

William J. Brennan, Jr.:

Is this a Treasury Decision?

Eugene L. Grimm:

Yes, Your Honor.

William J. Brennan, Jr.:

I see.

Eugene L. Grimm:

It’s called by that name, but it is nonetheless an administrative regulation of the Treasury Department.

It has — Treasury Decision have been the subject of opinion by this Court before.

One of the various earliest cases by this Court dealing with the interpretation of — or dealing the administrative regulations, United States versus Ethan involved a Treasury Decision.

William J. Brennan, Jr.:

And this has not been published as a Treasury Decision?

Eugene L. Grimm:

That’s right, Your Honor.

William J. Brennan, Jr.:

Well, what is the significance of filing it with the division of Federal Register?

Eugene L. Grimm:

Well, that is its effective moment of the date of the actual minute upon which it is filed with the division of Federal Register.

William J. Brennan, Jr.:

It wasn’t published in the Federal Registry?

Eugene L. Grimm:

No, publishment in the Federal Register is not essential to its binding effect.

Potter Stewart:

I understand that.

I simply asked you whether or not it was published in the Federal Register?

Eugene L. Grimm:

No, sir.

It was published as I say in bound volume and then —

Potter Stewart:

Along with the other so called TDs?

Eugene L. Grimm:

That’s right.

And it’s disseminated to collectors of customs through the use of periodic bulletin, weekly bulletin sent to a commissioner of the customs and to persons interested in this field.

In dismissing the information, the District Court considered the statute and these regulations and also an affidavit from defense counsel to the effect that appellees have marked the offending violins as “made in Germany.”

The Court concluded that regulations require different marking on articles from East and West Germany only for the purposes of imposing the proper duty and not for the purpose of implementing the marking statute 1304.

In other words, it read the restriction contained in the second paragraph of that Treasury Decision on page 6 and 7.

It read that restriction in the second paragraph for the purposes of the value provisions of Section 402 into the third paragraph of the decision as well.

That is the paragraph beginning articles manufactured or produced in the Federal Republic of Germany.

Now, on Appeal by the Government it was also held that the regulation was too vague and indefinite to sustain a criminal prosecution also.

On Appeal by the Government to the Second Circuit, the Court of Appeals held that the District Court’s opinion construing the regulation was tantamount to a construction of the statute upon which the information was founded and that the order of dismissal was that appealable directly to this Court under the Criminal Appeals Act.

It said, when Congress used the term statute in Section 3731, that is the Criminal Appeals Act, it did so in the broad sense and meant to include all that could have the force of law from the exercise of the powers which Congress may have granted as part of — part of the statutory scheme.

The Court of Appeals was also of the opinion that the dismissal of the information amounted to an order sustaining a motion in bar since the fact of the order end the cause and exculpate the defendant.

Now, as to the question of jurisdiction, we think the court – that the Court of Appeals would have proper forum for this appeal.

We believe the word statute as used in the Criminal Appeals Act means Act of Congress and not administrative regulation.

Although of course, as the basic premise administrative regulation have the force of law, but the none — it nonetheless remains true that as to any specific statutory Act done by Congress, it’s necessary to look at the context in which the words have been used to determine whether the statute as used in that particular piece of legislation also includes administrative regulations.

We think that, since so far as the Criminal Appeals Act is concerned, the word statute should be read narrowly so as not to apply to administrative regulation.

Eugene L. Grimm:

Now, there are a number of reasons for this.

First of all, administrative regulation, although they have the force of law are subordinate to the laws themselves that is the law passed by Congress and this status of subordination has been consistently maintained.

For example, only Congress may impose a criminal penalty for violation of a regulation.

Only Congress may declare the policy as to what type of conduct may be punished or established under what circumstances a particular Act shall be criminal or established criteria to aid or to govern the issue into administrative regulation.

And continued prosecution depends upon the continued life of a basic statute, that is absent from savings clause whereas revocation of a regulation does not have this effect, that is the affect of terminating prosecution.

So, that in the end, the regulation, no matter how sweeping they maybe, must find their justification within the basic statue which authorizes their issuance.

With these considerations in mind then that the regulation is subordinate to the Act of Congress and that there may well be a real difference, a look at 18 U.S.C. 3731 that is the Criminal Appeals Act.

The provision in the Criminal Appeals Act for direct review here on — at the request of the Government has always been narrowly construed by this Court.

It’s always been construed, so to deny Supreme Court jurisdiction when it is reasonably possible to do so.

And there’s a — there’s a reason for this, it has been said that in one aspect at least, the history of this Court is the progressive contraction of mandatory review.

Obviously, Congress has a — had to keep the work within capability of the nine judges sitting here and so, we’ve always seen a gradual withdrawal of provisions for automatic review.

Now, the Criminal Appeals Act runs counter to this trend of the year and perhaps because of this and perhaps because of other reasons such as the reason that an appeal by the Government is not usually favored.

This Court has always narrowly construed the Criminal Appeals Act.

Felix Frankfurter:

But, am I wrong in thinking that such narrow constructions, that one was to generalize the instances or related to the question whether the District Court passed on the statute whatever the statute means or decided the matter of criminal pleading in procedure — pleading to take this?

In other words, when there were cases, you’ll correct me, my recollection is that all the cases where that difficulty has arisen have been the cases where the District Court had been a little muddy of all cases in the enabling of this Court to determine whether the District Court went on the question of pleading or went to the heart of the invalidity or with respect to the statute.

William O. Douglas:

That wasn’t the case (Inaudible)

Eugene L. Grimm:

No, Your Honor.

In Foster, there was a construction of both administrative regulation and statute.

William O. Douglas:

I mean, the issue — the issue hasn’t always been whether it’s pleading or whether it’s a statute.

As I remember Foster, it was whether it was a construction of the statute in view of the fact that they passed upon the regulation.

Eugene L. Grimm:

That’s right, Your Honor.

William O. Douglas:

Is that right?

Eugene L. Grimm:

That’s right, Your Honor.

I misquote myself.

It was the construction of the statute.

There, the post master’s salary depended upon the gross receipts of his office and the regulation said he was not to include the (Inaudible) —

Felix Frankfurter:

And that was passed on its present —

Eugene L. Grimm:

No Your Honor, no Your Honor.

Felix Frankfurter:

As I understood —

Eugene L. Grimm:

No, Your Honor.

Eugene L. Grimm:

The Court of Appeals thought so.

Felix Frankfurter:

What?

Eugene L. Grimm:

The Court of Appeals thought so and thought that the Foster case cited in our brief and discussed in our brief —

Felix Frankfurter:

It’s not in my mind.

I mean, look at it.

Eugene L. Grimm:

At page 233 U.S. 515.

Felix Frankfurter:

Put that case aside all the cases in the 20 years decided here, have been cases of pleading, questions of pleading, haven’t they?

Eugene L. Grimm:

Generally, that’s true.

But —

Felix Frankfurter:

It was in general?

Eugene L. Grimm:

Well, yes.

Of course the question had — this precise question has never before come to this Court.

Felix Frankfurter:

No.

But the — that — I am addressing myself to your proper consideration of the etiquette of the Court in construing strictly.

My question is with reference strict, with reference to what standard or what subject matter.

Eugene L. Grimm:

Well, it is — it is true.

Felix Frankfurter:

Not —

Eugene L. Grimm:

It is true that it’s been restricted strictly to the case where the District Court has gone to the question of the validity or construction of the statute and that alone put on what — the basis upon which the Court has narrowed its review has been upon this provision of the Criminal Appeals Act.

Felix Frankfurter:

Doesn’t shed any light from me at all in this statute and for many differences, statute includes any pronouncement that has the force of the law, take the cases that come here under the three-judge court statute, the case in which Mr. Justice Brandeis quotes, I think it was a need (Inaudible) opinion but is not been the law of this Court, has it?

Eugene L. Grimm:

No, sir.

William O. Douglas:

That question has already been decided (Inaudible)

Eugene L. Grimm:

No, sir.

It is never been undecided.

Felix Frankfurter:

It hasn’t been.

Of course it hasn’t been decided but I’m trying to get guiding lines on the basis on which I should decide it.

And your remark before we strictly construe, Criminal Appeals Act doesn’t help me either slightly because the basis of strict construction has related fundamentally I insist on the question and I look at Foster, on the question of whether it’s pleading or not or whether the pleading is so involved with construction that we draw it back on pleading.

Eugene L. Grimm:

Yes, sir.

Yes Your Honor, but, that’s put upon on this basis that the statue, the Criminal Appeal statute says that the Government is entitle to appeal only from a decision where such decision or judgment is based upon the invalidity or construction of the statute upon which the indictment or information is founded.

Now, there has — there have been — there is at least one case which strikes my mind where the District Court Judge did not put his — did in fact construe a statute but he did not construe the statute upon which the information was founded and in that instance, this Court returned the case to the District Court to permit him to consider the statute upon which the information or indictment actually was founded.

Now, there, the decision was not upon a question of pleading.

Felix Frankfurter:

Well, we’ve also considered the fact when we couldn’t tell.

Eugene L. Grimm:

Oh, Yes.

When the —

Felix Frankfurter:

We couldn’t tell.

Eugene L. Grimm:

Or when views were intertwined or when he was so vague that you couldn’t be sure.

Felix Frankfurter:

And I am very sympathetic, really sympathetic with your provision that this — this Court should construe legislation could have not (Inaudible) but it doesn’t help me if you invoke that and in Court constantly review direct — on direct appeals constructions of regulation under the old (Inaudible)

Eugene L. Grimm:

Well, sir, the fact that you require — that you’re called upon to review under one statute is not necessarily an argument to review under the other.

Felix Frankfurter:

No.

But — I can’t just think it’s true that that has some — I need some — some rational lines and the line you have forthwith is very sympathetic, but I am up against these cases that come here constantly when you take the opposite to the statute is anything that is admitted by authoritative law admitting volumes has to be obeyed.

Eugene L. Grimm:

Well, sir, I — I once again —

Felix Frankfurter:

(Voice overlap)

Eugene L. Grimm:

And — and it’s not been that — of course I must begin with the proposition that hasn’t been decided.

But granting that, then I can only go upon the cases that have been decided and it’s true that they’ve involved issues where there has been — this Court has declined jurisdiction where there has been a mixture of view which expressed by the District Court and where the sole basis for this decision was not the construction or invalidity of a statute itself.

But nonetheless, I have to rely —

Felix Frankfurter:

But the Court’s — the Court (Inaudible) looks the other way, fight the other way and it looks to be the other way on — and now is it of the enforceability, the criminal enforceability of the of regulation.

Your argument goes under Ethan and what’s the name of the (Inaudible) on the regulation (Inaudible) statute.

Eugene L. Grimm:

Oh, dear.

Felix Frankfurter:

Here is a well know, Primo — Primo.

I think it’s Primo against United States.

Eugene L. Grimm:

That’s right, Primo.

Felix Frankfurter:

Primo (Inaudible) all those cases beginning with this, there would be (Inaudible) each is particular indicted because Ethan said, unless the Congress specifically said violation of a regulation shall be (Inaudible) there is no empowering authority to regulate regulations.

Eugene L. Grimm:

And provide — and provide some —

Felix Frankfurter:

So that there was a statute behind the regulation.

Eugene L. Grimm:

And provide some penalty for the — violation of the regulation.

Felix Frankfurter:

In that moment that there — that there must be a specific statutory provision —

Eugene L. Grimm:

Precisely at all.

Felix Frankfurter:

— on he basis of which and penally enforce the regulation.

Eugene L. Grimm:

That’s precisely looked so.

When this simply illustrate —

Felix Frankfurter:

Of what (Inaudible)

Eugene L. Grimm:

That concludes neither all is that this is a distinction between a regulation and a statute.

This is one of the things that regulation cannot do.

Felix Frankfurter:

But statute is the foundation of the regulation otherwise, you couldn’t — you couldn’t prosecute.

Eugene L. Grimm:

Nonetheless, it is the statute alone which establishes the penalty for violation of the regulation.

Similarly with respect to case such as Hark, there the allegation was the violation of an OPA regulation.

Now, that regulation was revoked after the Act and before the indictment, but the basic statute has not been changed and so, the prosecution continued to live on and the District Court conclusion dismissing it was reversed here on direct appeal.

Felix Frankfurter:

You haven’t said a word about any light of degree from the enactment of the original Act of 1907.

Eugene L. Grimm:

Well —

Felix Frankfurter:

Can we get any light at all?

If you want —

Eugene L. Grimm:

First, — first of all —

Felix Frankfurter:

— existent then but there are good many.

Eugene L. Grimm:

Well, I’ve — I’ve searched very carefully through the legislative history of the 1907 Act and I have not been able to find any reference to administrate a regulation.

So far as I can see, the primary holding, the Court holding which brought on a Criminal Appeals Act was the so called Beef-Trust case —

Felix Frankfurter:

The Armour case.

Eugene L. Grimm:

— the Armour case where a District Court have sustained a special plea in bar and the Criminal Appeals Act of course made that a separate basis for direct appeal here.

And in case that special plea in bar, there is no necessity to show that the District Court had construed a statute.

But, so far as I’ve been able to tell from the legislative history itself, this question of — question of administrative regulation simply was not considered at least not on the floor of the Senate nor on the floor of the House, nor in the reports of judiciary committee of the Senate, nor in — nor in the President’s message recommending a Criminal Appeals Act or —

Felix Frankfurter:

I simply bet that (Inaudible)

Eugene L. Grimm:

Second, it all — it also should be said too in that respect that the Criminal Appeals Act has been considered by this Court many, many times since 1907.

And — well, I cannot point to a specific case where there was something other than an issue of pleading involved.

I conclude that the word “statute” should be read not to include in — an administrative regulation because of the tone of the cases more than of anything else.

The tone of the cases has been to read very strictly that they —

William O. Douglas:

(Inaudible) part of the merits at all?

Eugene L. Grimm:

I like to spend a few minutes on the merits sir.

William O. Douglas:

No, no.

Are there special plea involved?

Eugene L. Grimm:

I would like to say I couldn’t deal about special plea in bar.

William O. Douglas:

If you have to.

Eugene L. Grimm:

To say just as — to talk just briefly about a special plea in bar.

Eugene L. Grimm:

The word motion in bar used in the present statute, I think has the same content as the word special plea in bar as originally used in a Criminal Appeals Act in 1907.

I think it is very clear that there has been no change in content.

The change in phraseology is simply meant that the content of special plea in bar have used by Congress has simply been poured in the phraseology motion in bar.

Now, so far as I have been able to find a special plea in bar has always been distinguished by the fact that it, number one, bars the action completely.

Number two, relies upon material extrinsics to the offense itself and number three has been raised specially by the defendant.

Instances held by this Court or and by other courts to be special plea in bar includes such issues as res judicata — res judicata, statute of limitations as a matter of law, well, it depends upon statutory construction.

Pardon —

Charles E. Whittaker:

Is it possibly that there has been a little time when (Inaudible) in bar.

It’s not in relation with bar.

Eugene L. Grimm:

That’s right, Your Honor.

The original Criminal Appeals Act said special plea in bar.

That language continued up until 1948 when it was changed to motion in bar and it was changed merely conform to Rule 12 of the Federal Rules of criminal procedure.

Rule 54 (c) of the Federal Rules shows that to be so that the — that — and United States versus Hark showed that to be so too for that matter.

Although Hark says a motion in bar as anything that ends the cause and exculpates the defendant that was true within the — within the meaning of Hark within that situation, but a special plea in bar when you state generally what it is, you must also go on a say that it depends upon extrinsic fact as well as upon the — the fact that it ends the cause and exculpate the defendant.

Charles E. Whittaker:

Why not the motion considered in a patent or in bar, (Inaudible)

Eugene L. Grimm:

No.

Well, originally, the law — a new plea is an abatement plea, special pleas in bar and pleas in bar and demurrer.

Example of pleas in the abatement, they were distinguished from pleas in bar in that they — the plea in abatement only defeated that particular indictment.

It did not defeat the cause of action itself.

Examples are venue, when the venue provision is not in its basic statute, miss joinder and defect on the grand jury proceedings, things of that sort, if I may say just very quickly with respect to the merit here.

As I said, the District Court rather restriction of — of the second paragraph of the Treasury Decision into the third paragraph of the Treasury Decision, this we think was wrong from many reasons.

First of all, the title of the regulation says that — it applies to tariff status marking to indicate the name of the country of origin and customs evaluation products of Germany, Poland and (Inaudible).

To go back to the background here, in 1946 the Treasury Department had said, “Well, you can mark products emanating from all four zones as made in Germany.”

In 1949 however, the western zones refused and we’ve permitted that Federal Republic of Germany to come into existence.

And from that moment on at least, the Russian zone of Germany stood on a different footing from the other zone.

In 1951, Congress and the President acted in this customs field to show that the Soviet zone stood on a separate footing.

It withdrew the most favored nation treatment from the products from the Soviet zone.

In 19 — with it — In 1953 then against that background that this Treasury Decision was issued.

And as I — as I’ve said, the title says that it dealt with three subjects and the regulation itself shows that it deals with three subject.

First of all, the first paragraph deals with Tariff status and withdraws most favorite nation treatment from the product of East Germany that continued it from products from West Germany.

Eugene L. Grimm:

The second paragraph deals with value provision and it gives the definition of country there, it says that the Federal Republic of Germany shall be treated as one country on the eastern zone as another country and country is not country of origin, country appears in Section 402, country of origin appears in 1304.

Earl Warren:

And your the conclusion from that is what?

Eugene L. Grimm:

My conclusion from that Your Honor is that paragraph two and three deal with different things, value and marking to inform the public.

They are phrased in different language, country and country of origin.

They serve different purposes, number one, collecting the proper amount of duty and number two, informing the public (Inaudible).

For these reasons because they have a separate purposes and so forth serve different functions, the restriction of the second paragraph should not be read into the third paragraph.

The title says that they are separate — they should be treated as separate.

It’s only when you read that restriction of the second paragraph from the third paragraph that the regulation becomes confusing because if you need — if you apply the third paragraph only to customs valuation, that defines a phrase a country of origin which isn’t is the value provisions of the Tariff statute and for this reason, we think it’s — it’s incorrect to read that restriction into third paragraph.

My time is —

Earl Warren:

Mr. Schapira.

Julius L. Schapira:

Mr. Chief Justice may it please the Court.

This case is here presumably under provisions of Section 3731 of the Criminal Appeals Act.

Now that section says nothing about the jurisdiction of this Court reviewing a determination of the Court of Appeals.

Under that section, the Appeal lies directly from the District Court to this Court and only when the Government makes a mistake and Appeals to the Court of Appeals, then the Court of Appeals takes a sort of conduit, just certifies the case directly to this Court.

Now, I respectfully submit that the Government wanted a review of the determination of the Court of Appeals it should have proceeded by writ of certiorari.

Apparently, they thought so too that in the beginning they got an extension of time, 30 days and abandoned the idea and waited until the case was certified here.

Now, under the question of jurisdiction, we respectfully submit again this — I don’t know how this case got here for review by the Court of Appeals determination.

If this Court should take jurisdiction and considered the decision of the Court of Appeals, may I submit that the opinion clearly establishes that the Government’s position was sustained an absurd result would be accomplished.

We would have a situation where regulation is appealable to the Court of Appeals and statute as appealable to the United States Supreme Court.

Moreover, as is pointed out in that opinion before 1942 when the Court of Appeals didn’t have specific jurisdiction set forth in 3731, an appeal could have taken here directly from the District Court where a determination was made involving the construction of the statute, but if there were an administrative regulation involved, there was no fault to take an appeal because there was no —

Felix Frankfurter:

I don’t — I don’t understand because if this Court — if no direct appeal could be taken to it from the construction, from the decision by the District Court construing the regulation one way of that in another, if direct appeal couldn’t be taken to this Court because it did not constitute a construction of the statute, both statute, the approval of appeal that then, the general appealability of final decision by the District Court to the Court of Appeals come into operation.

Julius L. Schapira:

May I respectfully direct to Your Honor’s attention to the footnote of the opinion of the Court of Appeals on page 18 of the record?

Felix Frankfurter:

Yes.

Julius L. Schapira:

It says that an Appeal such as this would ever have been within in the Supreme Court’s exclusive jurisdiction, it is not, since that Court’s jurisdiction remain undiminished when jurisdiction of the matters not appealable to it, was first vested in the Courts of Appeals in 1942.

Before 1942, it had held that there was a distinction between statute and regulation for purposes of appeal would have made dismissals based on the latter wholly unappealable and would have defeated remedial purpose of the statute.

Felix Frankfurter:

I don’t understand that, I don’t understand that.

Julius L. Schapira:

I simply submit this to Your Honor as part of the opinion —

Felix Frankfurter:

I don’t think that 1942 statute — assuming this Court, assuming this is not within the term statute of the 1907 Act and it’s just to inform, (Inaudible), I do not know of anything that wiped out the appealability of to the Court of Appeals of any find decision of the District Court.

There maybe such an — all I’m saying is that I don’t know.

Julius L. Schapira:

Well, I don’t know off hand the authority, but my impression is that the Court of Appeals had in mind the provisions of 3731 which confers jurisdiction on this Court in these specific cases —

Felix Frankfurter:

But if it — if it doesn’t confer, then it isn’t — then it isn’t in this Court it therefore remains a law.

Julius L. Schapira:

And that same section if Your Honor please also stated that the cases which are not appealable directly to United States Supreme Court shall be appealable to the Court of Appeals.

And I presume that the Court of Appeals had meant, when it made this footnote that if the cases were not appealable to this Court, then where will it go?

If it had — it were a statute — if it were not a statute but an administrative regulation, that’s my presumption I say and —

Felix Frankfurter:

But it’s not (Inaudible)

Julius L. Schapira:

That was the footnote says.

But if that would happen, of course the assumption of the Court of Appeals here is that a regulation is tantamount to a statute.

Felix Frankfurter:

I understand that.

I understand all that.

But I don’t understand the — the dilemma which you present (Inaudible) that if you — to come here, you can’t go any where, that I don’t know.

Julius L. Schapira:

I don’t say that, that’s true now nor of the Court of Appeals said that it was true or not.

The Court of Appeals simply said they would have untrue in 19 — before 1942 and that for my purpose —

Felix Frankfurter:

— 1959

Julius L. Schapira:

Precisely, that’s why I wasn’t particularly concerned anymore than I was concern whether this — whether the learned discussion of this situation between common law demurrer and a special plea at bar.

I think Federal Rule 12 abolished all the distinctions and provided just for one medium, a motion to dismiss and that’s what we have here, a motion to dismiss.

54 (c) of the Federal Rule 2 shows that there is no longer any distinction and while that maybe gratifying and academically interesting, I don’t think it belongs in this case.

I might say in passing that if ever there was a case of de minimus I think this is one.

I think we have no business in the proliferation of this Court.

Perhaps —

Felix Frankfurter:

We agree — disagree with the Court of Appeals.

Julius L. Schapira:

Well, it shouldn’t be any place and neither the fact —

Felix Frankfurter:

It has to be at some place that —

Julius L. Schapira:

Well, may I — may I respectfully answer that directly and that’s this.

It’s my — my considered opinion that where there is an administrative regulation involved and a Court, the District Court judge makes a determination that there is an ambiguity for whatever reason maybe even though the Government does not agree, it would seem to me be more just fair and sent to me cheaper in the long run to have the administrative agency correct the regulation rather than to take an appeal of any Court.

Felix Frankfurter:

Neither you or I can (Inaudible)

Julius L. Schapira:

Well, that’s true.

When I say certainly is more expedient and that’s why —

Felix Frankfurter:

In the rational world, that was really happening.[Laughter]

Julius L. Schapira:

I hope to be irrational for a little while.

In any event, it would seem to me that that, that would have been the — well, I’m simply saying that I didn’t think this case belong to this Court as I’ve said not even the Court of Appeals.

Julius L. Schapira:

These people, these defendants here are not criminals.

They are small businessmen and they — they – the only — a many — very unique expensive violins I think they will sell down as a piece.

And they had a few workers and traditionally, what they would do, they would put their name on top of the label that they — they found in the violin stamp that’s made in Germany.

But may I direct the Court’s attention to the fact that, these facts are not disputed at all.

That the — the stamp made in Germany was perfectly legal until 1953 and when an Act of Congress which imposed the penalty for stamping a violin imported from Eastern Germany made in Germany.

The Treasury regulation 51527 specifically said that you may stamp these violins made in Germany.

Now, 53210 comes along and says specifically and this — this is the nub of the thing for purposes of the value provisions of Section 402 nowhere that this Treasury Decision regulation say anything about 1304 or 304 or anything at all.

It simply says for the purposes of value and then it goes on in the same paragraph and it says, “insofar as this ruling on value results in any change of practice.”

So, the emphasis is always here on value.

Since the Tariff Act had a dual purpose, one to determine the value provisions for custom purposes and the other for general consumption.

I respectfully submit that this — the District Court decision was sound and correct when they found that this particular regulation did not intend to enlarge or create a crime.

In fact, its effect as stated by the Government, if the Government position is correct, is to create a crime where a crime was not there before.

Government in its brief has gotten into political phase aspect of this case and this too, I earnestly and respectfully submit, it is not the reason why the Court should not construe this regulation any other way because it is conceivable that the policy of the Government was not to advertise to the whole world that there were two Germanys.

It’s conceivable that the policy of our Government was to only — put commercial pressure on Eastern part of Germany and no other and this is conceivable that the intention of the draftsman was to limit himself only to the question of values and not to general political effects.

Charles E. Whittaker:

This problem may I —

Julius L. Schapira:

Yes, sir.

Charles E. Whittaker:

Is there any contest between you and the Government over the statute proper or are you merely disputing the proper interpretation of Treasury Regulation 5321?

Julius L. Schapira:

It’s the latter.

Charles E. Whittaker:

Just the latter?

Julius L. Schapira:

Yes, Your Honor.

We don’t question the authority of treasury to issue regulation.

We don’t question the validity of the statute.

What we say simply is that this regulation — either didn’t intend to create the crime or if it intended, didn’t accomplish it because —

Charles E. Whittaker:

So then — so then, no statute has been held unconstitutional?

Julius L. Schapira:

No, sir the statute has not been held unconstitutional.

Charles E. Whittaker:

It is only been held that the regulation purporting to have been issued under the statute was void, under your view?

Julius L. Schapira:

Yes, Your Honor except this for purposes of jurisdiction again if that’s what we’re — we are thinking of now is that you cannot construe the regulation without construing the statute.

The regulation itself does not have any criminal sanctions or any sanctions for that matter.

So, that a construction of the regulation necessarily involved the statute there is nothing into regulation that says it’s a crime to do anything.

So, if we want to find out what it is, that is prohibited or what the sanction is, we have to go to 1304 (e) of the statute.

Felix Frankfurter:

Yes, but unlike the Foster case where you have the (Inaudible) of the statute in order to determine the ultra or intra varies of the regulation?

Julius L. Schapira:

Yes, Your Honor.

Felix Frankfurter:

There is no such question about it around —

Julius L. Schapira:

No, sir.

We don’t question the authority of Treasury for to issue —

Felix Frankfurter:

(Inaudible) the statute as the authorizing, penalizing state.

Julius L. Schapira:

Precisely.

What — what we are urging is that the statute is incomplete because the statute does not define the country of origin.

We couldn’t possibly know whether it is or it is not a crime and yet —

William O. Douglas:

The regulation?

Julius L. Schapira:

I mean the statute because the statute simply says that what we need is an indication of the country of origin but there is no definition in the statute of the country of origin.

We must go to the regulation to find out what we mean by country of origin.

Well —

Charles E. Whittaker:

Go ahead, pardon me.

Julius L. Schapira:

Before 1953 the country of origin was Germany.

After 1953 the country of origin was Germany-USSR.

That wasn’t made by the statute, it was made by the regulation.

Charles E. Whittaker:

Well then doesn’t that present a question of the validity of regulation whether it is in the statute?

Julius L. Schapira:

Yes, Your Honor.

The question of the regulation, but at the same time we cannot divorce the regulation from the statute because the regulation of itself hasn’t any power.

It has any sanction.

Charles E. Whittaker:

You mean then that under Criminal Appeals Act, a regulation purporting to have been adopted under the statute, even though voids the mark and unauthorized presents a matter directly appealable to this Court and not to Court of Appeals?

Julius L. Schapira:

Well, I — I’m not quite sure?

Charles E. Whittaker:

Do you understand what I mean?

Julius L. Schapira:

I am not sure that I do.

Charles E. Whittaker:

Well, is it your position that a regulation which is broader than and not authorized by the statute which purports to impose some duty and results in the controversy that that fact alone makes that matter appealable directly to this Court under the Criminal Appeals Act?

Julius L. Schapira:

Yes, Your Honor.

It would make it directly appealable under the theory that the regulation is tantamount to a statute within the provisions of 3731.

Charles E. Whittaker:

Not for that — not for that reasons, but that you couldn’t tell whether it was a (Inaudible) statute without construing the statute.

Julius L. Schapira:

Precisely.

Julius L. Schapira:

Well, that’s the additional reasons —

William O. Douglas:

Here, you have (Inaudible) a different one concededly making the regulation (Inaudible) permissible –

Julius L. Schapira:

Yes, sir.

William O. Douglas:

(Inaudible) we have nearly the problem construing the regulation, is that right?

Julius L. Schapira:

Yes, sir.

We concede that regulation was issued pursuant to authority and was not authorized, but what we are saying here is that since we are construing the regulation for criminal purposes.

Now, I want direct the contention of the Court to the fact that there is no question of duty, there is no question of custom here.

These — these defendants were only middlemen.

They didn’t import, they didn’t export and I — I wanted to say this that with all due difference, the Government was wrong when it said in the last page of its brief and said any persons in the import-export business would understand and have no difficulty in applying.

The record shows that these people are not in the import and export business, they didn’t know anything about regulation at all and they did not intentionally that —

Do you think you’ve stated the facts under this statute without referring to the regulation?

Julius L. Schapira:

No, sir because the statute itself does not define the country of origin.

All it says is that an importer must have a mark showing the country of origin and —

Felix Frankfurter:

And you (Inaudible) as an offense under the regulations are referring to the statute?

Julius L. Schapira:

There is no sanction under the regulation.

Felix Frankfurter:

Therefore, you have to go to the statute.

Julius L. Schapira:

Precisely.

Charles E. Whittaker:

But what have you — excuse me please.

Julius L. Schapira:

Yes, sir.

Charles E. Whittaker:

What have to say sir about the — the fact that matters — judgements undergone motions in bar are appealable directly here?

Julius L. Schapira:

Now, I can only repeat what the Court of Appeals said and that’s this.

I think that the Government missed the point of the decision of the Court of Appeals.

The Court of Appeals in its opinion stated that this case is appealable directly here, one because it involves the construction of the statute and then two because it was in the fact the motion in bar.

Now, what the Court of Appeals said that, in the event that this Court should determine that this was not involving a construction of the statute and therefore was not appealable directly here.

Then, it would be appealable as a motion in bar and by that it meant, that it doesn’t make any difference what the motion is called as long the end result is to say regardless to exculpate the defendant without putting him in jeopardy and that was the nub of the decision of the Court of Appeals on that case.

So, it didn’t make any difference what it is called.

It’s the effect of the motion and if this motion stands, this motion — the order of the motion stands then of course the defendants are clear.

There is no longer any case and the effect is for the motion in bar and therefore, it’s appealable directly here to this Court under the second part.

In other words, there are two — two bases.

One is that it — this — this determination by the District Court involved the construction of the statute regulation be tantamount to a statute or this regulation in any event was so intertwined with the statute and one couldn’t construed without the other and two, that even if it isn’t such, then the effect of the dismissal was the effect of the motion in bar and therefore comes squarely within the provisions of 3731 that where there is a dismissal in effect the motion — the motion in bar and the motion in bar, the appeal lies directly to this Court.

Felix Frankfurter:

Isn’t that — Mr. Schapira, may ask that, I don’t see how you can you gain concluding that the Court of Appeals was right in certifying the case to this Court, this case is therefore properly in this Court and this Court must pass on the merits of the construction regulation, you (Inaudible)

Julius L. Schapira:

I certainly agree 100% there’s no question about it.

Felix Frankfurter:

Alright.

Julius L. Schapira:

My only — my only preliminary question was that I was wondering how the Government got here in the first place?

Felix Frankfurter:

That’s a question I was going to ask you.

You said something about (Inaudible)

Julius L. Schapira:

Precisely.

Now, I think —

— the Court of Appeals sent it here.

Julius L. Schapira:

You, Mr. Justice signed an extension of time gave them — you gave them 30 days to file a petition for certiorari and then they abandoned the idea.

Now, they got sent here and this is rather curious situation.

The decision of the Court of Appeals said that the appeal would be dismissed unless the Government requested certification.

Now, the Government didn’t request, the Government came along and said we will not request and it said so in this memorandum which is part of the record.

What the Government did say was on page — on page 20 — 20 to 23 of the record.

The Government had submitted a memorandum disagreeing with the Court of Appeals and stating that it will not request that if the Court wants to, it may certify on its own motion.

Felix Frankfurter:

But the Chief — Judges of the Court of Appeals said the Government having requested certification would be (Inaudible)

Julius L. Schapira:

Yes.

I know that.

Felix Frankfurter:

Now, then were this Court could have certified, if they bring it to Supreme Court.

I’m glad they think the (Inaudible) Supreme Court might have been — might have been disqualify.[Laughter]

Julius L. Schapira:

Now, the — the Government said it is respectfully suggested that the transfer should be on the Court’s own motion rather than under the request of the Government.

It was so there — I was puzzled all the way and I still don’t know how the Government got here.

Felix Frankfurter:

(Voice Overlap) and gave you the perfect answer?

Julius L. Schapira:

In any event — I again — may I again if the Court pleases address this political aspect of this — this regulation.

I think it will be a mistake.

William J. Brennan, Jr.:

Just before you leave the procedural aspect, does it quite understand it that it’s your point that position that if we — this Court is without power now and send it back to the Court of Appeals?

Julius L. Schapira:

I say — well, I could — this Court has power but I say that the case rightfully belongs here.

I agree fully with the Court of Appeals that the appeal should have been taken here in the first place and that this Court should dispose of it that its own final determination should be made here.

William J. Brennan, Jr.:

On the merit?

Julius L. Schapira:

On the merit if the Court takes jurisdiction because it really belong — the Government should have appealed directly here in the first instance.

William J. Brennan, Jr.:

This is on the second (Inaudible) motion at bar.

Julius L. Schapira:

On either one.

William J. Brennan, Jr.:

(Voice overlap)

Julius L. Schapira:

On either one.

I — I should just — it would be — it would be rather construing the regu — the statute narrowly to make a distinction between the statute and the administrative regulation in the first place and in this particular case I think it would be doubly so because — one other thing as far as the defendants are concerned, it makes a very little difference what sends them to jail, whether statutory or administration.

Where is the Court of Appeals to this Court?

Julius L. Schapira:

And it would seem to me that the — that to make a distinction between this statute and the administrative regulation where the sanction is the thing, identical.

As a matter of fact, the sanction stems from this statute and administrative regulation never has any power to impose a criminal sanction without Congressional Act so that —

Felix Frankfurter:

You have shown no concern for that which is Mr. Grimm’s chief concern — concern namely that this Court should not — should be saved for having cases come here during regulation which it should be expected for construing statute, you show no concern for us at all.

Julius L. Schapira:

I haven’t for this reason, if Your Honor please because I think that the answer is that the Government should not appeal these cases.[Laughter]

I think — I think the simple truth is that the draftsman charged with drafting the regulations should be more careful in their draftsmanship.

This regulation is a sloppy job if I may say so and vernacular and I think that’s a shame that this people, poor people had to be dragged all the way and this case is the result of the zealous investigator where a very ambitious young — assistant United Stated Attorney who thought that this was the most important thing in the world, it isn’t.

I’ll still think it’s the de minimus if ever there was one.

Felix Frankfurter:

Every young lawyer thinks same have to engage the most important, the very good thing he does.

Julius L. Schapira:

It is — it is.

I agree I was once a young lawyer too and I too thought that my case was the most important in the world, but then again, I grew older.[Laughter]

(Voice overlap)

Julius L. Schapira:

I beg your pardon?

You don’t indicate, what you think this case is not important to (Inaudible)

Julius L. Schapira:

I think is unimportant only to the extent that it imposes on this Court.

I think that this Court got more important business to do.

It’s important to me and it’s important to my clients.

I don’t think that it’s important to have a determination which was made by the Court of Appeals and reviewed by this Court, in this case.

Now, it maybe the Court wants to know what to do with the administrative regulations.

I think the only thing to do is to draft it properly and if I may say so with all humility — due humility, I have something to do with drafting regulations when I was working for the Government and I — that was one of the things that I was concerned with to make sure that the job is done right in the first place.

Felix Frankfurter:

Well, if you have some kind of suggestion where by one to secure that, it will have that you might extend your interest to appeal to where they –[Laughter]

Julius L. Schapira:

I agree and finally in closing may I say that — just refer this Court to the (Inaudible) case where it was said at the very end what it not be in the public interest as well in the interest of justice to this petition to pronounce this vague regulation invalid.

It would seem to me that, that an interest to justice this petition — these defendants have already suffered more than the crime that they have charged with called for.

Thank you Mr. Chief Justice, thank you.

Earl Warren:

We’ll recess.