FREYTAG v. COMMISSIONER OF INTERNAL REVENUE

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Argument of Kathleen M. Sullivan

Chief Justice Rehnquist: We'll hear next in argument No. 90-762, Thomas Freytag v. Commissioner of Internal Revenue.

Ms. Sullivan, you may proceed whenever you're ready.

Ms Sullivan: Mr. Chief Justice, and may it please the Court:

This is a tax case with implications for up to 3,000 taxpayers and a billion and a half in alleged tax deficiencies, and it involved one of the longest trials below in the tax court's history... 14 weeks of evidence, complex financial testimony, 9,000 pages of transcripts, 3,000-plus exhibits.

But we won't tax you with any of the substantive detail of that tax case, because the sole issue before this Court is the authority of the special trial judge who presided over and, we assert, effectively decided the case.

We will raise issues both of the statutory and the constitutional authority of the special trial judge.

But I'd like to start of course with the statutory claim, because should you reverse this case, agreeing with our statutory claim, you would avoid the need to reach the constitutional question.

Now, the statutory framework that governs the special trial judges is straightforward.

It's set forth in Internal Revenue Code 7443A, which is reprinted at A100 in the cert. petition.

And it divides the work of the tax court potentially between the regularly appointed tax court judges, who now number 19, and special trial judges whom Congress has authorized the chief judge of the trial court to appoint and to remove at his pleasure.

Now special trial judges are governed by 7443A, B, and C.

And to make it simple, they have two kinds of function.

The special trial judges may hear and decide certain specified kinds of tax cases, specially specified declaratory judgment claims and small tax claims involving amounts under $10,000.

They may hear and decide those cases set forth in 7443A(b)(1) to (3).

(b)(4), the sole provision at issue in this case is the catch-all provision that says they may also hear but not decide any other proceeding.

Now let me try to clarify the points of agreement and disagreement between petitioners and the Government with respect to the statutory claim.

Petitioners and the Government agree completely that Congress did not authorize special trial judges to decide (b)(4) cases.

(b)(4), coupled with (c), precludes decision by a special trial judge.

Our difference with the Government... the heart of our statutory claim... is that in this case he did decide--

Unknown Speaker: Well, it precludes... it precludes making the decision of the court.

Ms Sullivan: --That's correct.

It--

Unknown Speaker: I'm not sure if it precludes making the decision, which is subject to the review of the court, in de novo proceeding.

Ms Sullivan: --That may be right, Justice Kennedy.

That is not what the tax court rules permit.

So our argument is that the tax court rules here are in violation of the statute even if the statute is properly read the way you describe to permit reports by special trial judges subject to de novo review.

Our key argument here under the statute is not only that the conduct of the judge below here amounted effectively to a decision in the case, but that the tax court rules ensure that special trial judges will effectively decide (b)(4) cases.

And I'd like to point out it... precisely how we read the rules to do just that.

The tax court rules... the key rule here is rule 183.

And we've reprinted that, if you wish to look at it, in the cert. petition appendix at A91.

Now the key features of that rule that we argue preclude what Justice Kennedy said might be permissible within the statute are rules (b) and (c).

Specifically I'd like to start with (c), if I might, on page A92.

Tax court rule 183(c), which is the governing rule in (b)(4) cases and was the rule at the order--

Unknown Speaker: What page of the... this is--

Ms Sullivan: --Cert. petition appendix A92.

Unknown Speaker: --A92.

Thank you.

Ms Sullivan: Specifically, Mr. Chief Justice, the last sentence of that paragraph (c) on A92.

You'll see in that sentence that the action on the report... and now we're talking about what the regular tax court judge to whom the case returns after the special trial judge has finished a report.

If you look at 183(c) last sentence, it provides... last clause of the sentence... that the findings of fact recommended by the special trial judge shall be presumed to be correct.

In other words, the tax court's own rules, Justice Kennedy, in answer to your question, preclude de novo review of the kind that is typical in other settings in the Federal Government where adjunct adjudicators are operating under the real... not merely formal... supervision of a regular judge.

To connect up to Justice O'Connor's question earlier, had magistrates' decisions in suppression hearings not been reviewable de novo, they would not be in compliance with the statute... the Magistrates Act... and may raise other constitutional questions.

But here de novo review of the kind that is typical under the Magistrates Act is actually precluded by the tax court's rule.

Unknown Speaker: When you say... when you say de novo review, Ms. Sullivan, you mean complete examination of every question of fact without any presumption of correctness at all?

Ms Sullivan: Not necessarily, Mr. Chief Justice.

We at least mean in order for the statute to be complied with that the regular tax court judge to whom the report of the special trial judge returns must at least demonstrate as he... as the district court must over in the magistrate setting that he has looked at or engaged with... looked beneath the findings of the special judge to the record and the arguments of the parties below.

Unknown Speaker: Well, you... do you mean demonstrate by some sort of a written opinion of his own?

Ms Sullivan: Not necessarily, but at least by the operation of a general rule that provides that this engagement will take place.

That's the kind of rule that is in place in the Magistrates Act.

Unknown Speaker: Well, but you're saying as I understand it that this particular tax court rule which we're talking about here ensures that the special judges will end up deciding the cases.

Now, I... I don't read the rule that way.

It seems to me that you could say that if you're talking about a factual finding being... presumed to be correct, you could apply the clearly erroneous standard.

Ms Sullivan: That's right.

And the only... the only circuit court to interpret the statute has read it to require clearly erroneous review.

But the problem with the rule goes further than the... its application of the clearly erroneous standard if you wish to read it that way.

Notice that in rule 183, there is no opportunity to for the parties to see or to object to the special trial judge's report between the time it is written and filed with the regular tax court judge and the tax court judge's issuance of the opinion.

The first--

Unknown Speaker: Ms. Sullivan--

Ms Sullivan: --Yes, Justice O'Connor.

Unknown Speaker: --Did the... did the petitioners here agree to the assignment to the special trial judge?

Yeah.

Ms Sullivan: Look... there are three key moments in the case, Justice O'Connor, in answer to that question.

When petitioners came to the tax court back in 1982, they sought adjudication of their alleged deficiencies before a regular tax court judge, and they were so assigned to regular tax court Judge Wilbur, presidential appointee.

Judge Wilbur began to try the case... try the case from June 1984 through November 1985, when he suddenly became ill.

So there was no pre-trial consent to the special trial judge presiding in the case.

First key moment in the case is in November 1985, after this illness sets in, when... in mid trial... the petitioners consented to have a special trial judge, special trial Judge Powell, sit as an evidentiary referee while the proceedings were videotaped so that Judge Wilbur could still make the decision in the first instance based on the videotape.

Time goes by... December 1985 to June 1986.

Special trial Judge Powell does conduct the proceedings.

And then after the trial is complete, after all the evidence is taken, in July 1986 for the first time is it proposed by Chief Judge Sterrett of the tax court that Justice... Judge Powell, special trial Judge Powell, actually file the report under the provisions of (b)(4).

So there was a mid-trial consent to his continuing the case as an evidentiary referee.

And there was a post-trial consent to his filing the report.

Unknown Speaker: So, your answer is, yes, there was consent.

Ms Sullivan: Yes.

Unknown Speaker: I... if that's the situation, I'm not sure that we would reach any problem with the rule.

Ms Sullivan: Justice O'Connor, let me be clear on a distinction between this case... the Freytag case... and the Peretz case which you just heard.

In Peretz there was an issue of waiver of the statutory claim.

There is before this Court no issue of waiver of the statutory claim.

The Fifth Circuit held that the statutory claim was not waived by the petitioners' mid-trial consent to evidentiary refereeing or post-trial consent to the filing of the report.

The Government didn't cross-petition and has raised no claim of statutory waiver here.

So, in contrast to Peretz, I believe the statutory question really must be reached.

As to the question of whether the constitutional claim can be waived, we argue quite simply that it's a structural claim of precisely the kind that you, speaking for the Court, Justice O'Connor, in CFTC v. Schor said waiver should not affect.

But just to return to the third key moment in the trial if I could, it's October 21st, 1987, when we argue that the key decision effectively by the special trial judge is realized.

To answer your question, Mr. Chief Justice, October 21st, 1987, is the day on which the Chief Judge of the tax court, Judge Sterrett, does two things on the same day.

Number one, he issues an order reassigning the case to himself from special trial Judge Powell, who sometime in the proceeding 4 months had filed a report with the Chief Judge of the tax court.

Second, on the same day, he adopts and a... he states in an opinion that he agrees with and adopts the findings of the special trial judge.

Unknown Speaker: You're going to tell us now what's wrong with that?

Ms Sullivan: Yes, Justice Blackmun.

The problem with that two-sentence... a signature plus two sentences added to the 55 pages of the special trial judge's report... is that there is no basis to suppose there was meaningful review or therefore meaningful supervision that would enable us to accept this as the decision of the tax court rather than of the special trial judge himself.

Unknown Speaker: What if... what if it were 5 days?

Ms Sullivan: Justice Blackmun, as I've said before, we rely on the presumption of administrative regularity under the tax court's own rules, even if you should indulge the Government's speculation that it might have been 5 days.

I would add the Government does not disagree with us that a rubber stamp would be ultravirus against statutory authority.

The Government simply tries to suggest that perhaps it was 5 days or 2 days or 14 days... who knows?

The parties can't know, because they have no opportunity to see the special trial judge's report or know when it is filed or object to it, unlike the procedure in the Magistrate's court.

But supposing it was 5 days, Justice Blackmun, we argue that the tax court's rules, which we should presume were followed here, preclude de novo review, permit at most clearly erroneous review and, because there is no opportunity for the parties to object, do not put the regular tax court judge to any obligation to look beneath the special trial judge's own findings.

Unknown Speaker: Well, that... that's the very reason why I wonder why you're making such a big point out of the same day.

Ms Sullivan: Ah, yes.

Well, it's an alternative argument, Justice Blackmun.

We do think that there is nothing... absolutely nothing in this record to suggest that the regular tax court judge actually reviewed the case.

In fact, October 21st, 1987, is the day he reassigned it to himself.

And if you look at tax court rule 182(b)... if I could turn you back to A91 for a moment.

A91, tax court rule 183(b), you will see the appropriate sequence for the reassignment of a case from a special trial judge to a regular court judge.

The special trial judge shall submit his report to the chief judge.

And the chief judge will assign--

Unknown Speaker: Reading from page A91?

Ms Sullivan: --Page A91, rule 183, paragraph b, final two lines of the rule... final three lines.

The special trial judge submits a report and at that point the chief judge will assign the case to a division of the court.

Turning over to the next side of the page, rule (c).

Rule (c) says the division to which the case is assigned may adopt, modify, reject, or as happened here, simply adopt verbatim completely the rulings of the special trial judge.

If we presume administrative regularity, Justice Blackmun, there can be no inference other than that.

October 21st, the case came--

Unknown Speaker: The first... Judge Sterrett was chief judge.

Ms Sullivan: --That's right.

Unknown Speaker: He knew what was going on.

Ms Sullivan: Well--

Unknown Speaker: He must have known what was going on.

Ms Sullivan: --Actually, Your Honor--

Unknown Speaker: I'd like to ask him.

He's present in the courtroom--

[Laughter]

Ms Sullivan: --Like the line in Annie Hall where Woody Allen says, I just happen to have Marshall McLuhan right here.

[Laughter]

I won't ask him, Your Honor.

What I would like to point out not that... we cast no aspersion on Chief Judge Sterrett personally in the least.

What we are doing here in the absence of any evidence that there was meaningful review is arguing about what we should presume from the regular procedures of the tax court that Chief Judge Sterrett can be expected faithfully to adhere to.

And the published rules of the tax court say you reassign the special trial judge's case to a judge of the tax court and then that judge reviews it.

Unknown Speaker: Ms. Sullivan.

Ms Sullivan: Yes, Justice?

Unknown Speaker: Would you be satisfied with the usual expression that I think you and I have seen of an appellate court judge who says, I have reviewed all of the objections of appellate and find no merit in any of them?

Is that what you want?

Ms Sullivan: I believe we might accept that, Justice Marshall.

But the fact is under the tax court's rules, the chief judge of the tax court could not review all of the objections of the parties to the special trial judge's findings because they never got to see them.

Up until 1984, the tax court had provided by its rules for exceptions by the parties to the special trial judge's report and an opportunity to try to get the tax court judge to reject some of those findings.

That opportunity was eliminated in 1984.

One more fact in answer to your question, Justice Blackmun, that in fact it was not clear that Chief Judge Sterrett would be the judge of the regularly appointed tax court judges to whom the case was reassigned.

The stipulation... the agreement by the parties to which Justice O'Connor referred earlier was to permit Judge Powell, the special trial judge, to make a report of his findings for reassignment either to Chief Judge Sterrett or to Judge Wilbur, the judge who had become ill and whom, even up until October 21st, 1987, the parties believed might still be the one to get the case.

So you cannot presume on this record that judge... Chief Judge Sterrett would have paid attention to the case specifically at any moment up until he reassigned the case to himself, October 21st, 1987, the day he also issued his--

Unknown Speaker: Ms. Sullivan--

Ms Sullivan: --Yes, Mr. Chief Justice.

Unknown Speaker: --I wonder if questions of these rather detailed facts are fairly subsumed under the questions presented in your writ of petition... writ of certiorari?

Ms Sullivan: Mr. Chief Justice, we think clearly so and in haec verba, our first question was not contrary to the Government's suggestion, does the statute permit assignment of special trial judges only to preside at (b)(4) cases.

Our question presented and the one accepted... granted the review in the Court was, as you can see from the first page of our cert. petition, are complex tax cases allowed to be assigned to a special trial judge for trial and effective resolution.

In fact, effective resolution is the heart of our statutory claim and it was the ground on which the Fifth Circuit decided below.

The Fifth Circuit decided there was no rubber stamp, and hence, we were out of luck.

We claim that, regardless of whether you call it a rubber stamp or not, the tax court's rules ensure that, as happened in this case, the usual opportunities for supervision and control that one would expect in an adjunct adjudicatory scheme like this are missing.

In other words, just to put our point succinctly, Congress did not and could not have intended special trial judges in large, complex, multiparty, multimillion dollar tax shelter cases... alleged tax shelter cases such as this one... Congress did not and could not have intended such cases to be in effect decided by the autonomous actions of a special trial judge.

Now, if there are no further questions on the statutory claim, I'll move on to our constitutional argument.

As I mentioned at the outset, should you agree with us that the statute was violated by the tax court's rules and conduct in this case, you would then nonetheless need to reach... sorry... should... if you agree with us on the statute, you need not reach our constitutional claim.

But should you disagree with us on the statute, let me state as simply as I can what the key points of difference and agreement are between us and the Government.

Now, of course, we deal here with one of the plainest texts in the Constitution... the appointments clause that permits Congress to delegate the power to appoint inferior officers to the President alone, not at issue here, to the heads of departments, or the courts of law.

Now, if I could dispose quickly of the employee point and the court of law point, I will get to the key point of difference between us and the Government, which is whether or not the tax court may possibly be considered an executive department for appointments clause purposes and thus its Chief Judge the head of that department.

I think the employee point and the court of law argument can be dismissed quickly.

It is beyond serious dispute that special trial judges are inferior officers of the United States.

They are far more than mere ministerial aides.

They... and every court to have decided this question has agreed.

In terms of this Court's own definition there can be no doubt that they satisfy every formal definition of what an officer is.

They hold office created by Congress.

Justice O'Connor?

Unknown Speaker: Well, have we really gone into any depth in defining who is an inferior officer and who is an employee?

Ms Sullivan: The cases that we cite in our brief of Germaine from the late 19th century and Burnap, a Justice Brandeis opinion from the early 20th, are perhaps helpful in resolving the question of who is and isn't an officer.

But we would rely more heavily on your statement more recently in Buckley that the function... the functional test for an officer is whether he exercises significant authority pursuant to the law.

Now, there can be no doubt that a special trial judge, whether presiding, or as we argue he did here, deciding the case, is exercising significant authority.

In fact we would argue that there's a parallel here between special trial judges and magistrates, except that magistrates are more effectively supervised under the practice of the article III courts by their... the district courts under article III.

But in any event--

Unknown Speaker: Plus your argument here is at--

Ms Sullivan: --Yes, Justice Scalia.

Unknown Speaker: --cross purposes with your argument earlier--

Ms Sullivan: How's that?

Unknown Speaker: --your argument earlier.

I mean, well, the more... the more authority the special judge has the... to decide the case conclusively, the less likely he's just an employee and vice versa.

The--

Ms Sullivan: That's right, Your Honor.

It's... it's more clear, but we absolutely disagree that the officer is demoted to employee when he is merely presiding.

We think that's in appropriate.

He... a magistrate does not cease to be an officer and become a merely employee when he is carrying out pretrial hearings as opposed to disposing of a case.

And just as a lawyer is still a lawyer, protected by the attorney-client privilege, if she's at the xerox machine, just as the President is still President when he's walking the dog on the White House lawn, so a special trial judge cannot become an employee just because he is performing a task that could have been performed by an employee.

So we would respectfully say... respectfully suggest that even if there were effective supervision consistent with the statute, the special trial judge would still be an officer.

And thus, even in presiding in (b)(4) cases, would raise the constitutional issue.

But in any case, if you agree as... that the special trial judge is an inferior officer, we agree fully with the Government that the tax court cannot be considered a court of law for purposes of the appointments clause.

Unknown Speaker: --How about the... all these other courts that Mr. Griswold describes in his brief... the claims court, the territorial courts, the land courts, the District of Columbia courts.

Those all executive departments?

Ms Sullivan: Territorial courts we think are unreached by any appointments clause constraint, because when Congress exercises its territorial authority, it is acting in effect as a State.

Separation of powers concerns don't apply.

As to nonterritorial article I courts--

Unknown Speaker: What is the District of Columbia, by the way, in your particular dichotomy here?

Ms Sullivan: --I... I'd have to put it over with the territorial courts for purposes of the last remark.

I--

Unknown Speaker: I see.

So they... and again... tell me again, you say they are a department there?

Ms Sullivan: --You need not reach the question whether they're a department because separation of--

Unknown Speaker: Well, I know, but I'm curious about what your answer would be even if we don't have to reach it.

Ms Sullivan: --Not a department if you had to reach it.

Not a department if you had to reach it.

Unknown Speaker: So they are courts of law within the meaning of the appointments clause.

Ms Sullivan: Not courts of law or executive departments.

For appointments clause purposes--

Unknown Speaker: What are they?

Ms Sullivan: --they are out... you need not decide that.

You need not decide--

[Laughter]

--any question about the fourth branch of Government here.

Unknown Speaker: No we... assume we want to.

[Laughter]

Ms Sullivan: Assuming you wish to issue... I can't assume you would wish to issue an advisory opinion on the status of the fourth branch.

Let me just say that the Government has argued that there are only three branches.

Everything in the Federal Government has to fall within those--

Unknown Speaker: Yes, but what I'm... I'm asking--

--What do you argue... what do you argue as to the status of the courts that Justice Stevens mentioned?

Ms Sullivan: --We argue that they are not empowered under the appointments clause to appoint officers because they are... you need not reach it but if you had to... they are neither courts of law nor--

Unknown Speaker: Well, they were empowered by statute to appoint clerks, who are inferior officers.

Ms Sullivan: --Maybe employees.

You've never held they're inferior officers.

Maybe employees.

Unknown Speaker: Well, let's assume for a moment they were inferior officers.

The clerks of the court are pretty important.

They're officers of the court.

Our clerk is an officer of the Court.

Now, if they are inferior officers, you would... and the courts exercise judicial power beginning with the... Justice Marshall's opinion in the very early case, why are they not courts of law?

And if they're not... if they're courts of law, why is not this tax court also a court of law?

Ms Sullivan: They are not courts of law because they lack the independence guaranteed article III courts through the salary and tenure clauses of article III.

Courts of law in article II must mean courts of law in article III.

Unknown Speaker: Do they exercise the judicial power or are--

Ms Sullivan: They may do so.

They may exercise the judicial power of the United States.

But the appointment power does not follow the judicial power wherever it may go.

And all bankruptcy judges appoint their clerks--

Unknown Speaker: --Well, we're asking what is a court, and you're saying it exercises part of the judicial power, and Congress calls it... calls it a court.

We call it a court in Palmore.

And you say it's not a court?

Ms Sullivan: --Absolutely for appointment clause purposes.

Because remember the purposes of the appointments clause on which we and the Government agree... the purpose of the appointment clause was to--

Unknown Speaker: Which you and the Government now agree.

Ms Sullivan: --Now agree after many changes of heart on the Government's part, which is why you cannot rely on the executive branch to preserve and champion the appointments clause in this case.

[Laughter]

But on the waiver point--

Unknown Speaker: And that's why maybe the appointment was if... with the courts of law then.

Ms Sullivan: --On courts of law... to be... courts of law and heads of department make sense if the goal of the Constitution is to distance from Congress the awesome power to appoint executive officers.

What distances an entity from Congress?

Either the independence that you and the other article III judges enjoy through the tenure and salary clauses, which article I courts lack... or protection through the political might and muscle of the President.

The tax court... and it's like in this respect the courts Justice Stevens mentions... lacks... uniquely lacks both those attributes.

They are not independent like article III judges.

They are not executive... or controlled or supervised or protected by the President.

Unknown Speaker: Well, Ms. Sullivan is it your position that in the case of a territorial court, Congress could provide that the Speaker of the House would appoint the judges?

Ms Sullivan: They might raise in... certain... certainly not.

That... well, it would not raise an article III problem.

It might be in Congress, and the key point is that--

Unknown Speaker: The appointments clause just wouldn't apply in your view?

Ms Sullivan: --The appointments clause would not apply.

Unknown Speaker: Well, what's our closest case to support--

Ms Sullivan: The answer to your question is yes, that our argument would permit Congress to make that--

Unknown Speaker: --And what's the closest case--

Ms Sullivan: --hiring decision.

It's not an appointment.

Unknown Speaker: --What's the closest case from this Court that supports that position do you think?

Ms Sullivan: There's no case I know of that supports that position, so long as Congress is not appointing itself officers of the United States, as you ruled it couldn't do in Buckley, an appointments clause is not presented.

If I could just conclude, Your Honor, and save the rest of my time for rebuttal if there's any left.

Unknown Speaker: Well, let me ask you one other question though.

Ms Sullivan: Yes, Justice Stevens.

Unknown Speaker: If they're... if they're not courts of law and they're an executive department, as you agree with the Government, why then isn't the chief judge the head of the department?

Ms Sullivan: Not a department, can't be a department, no executive functions whatsoever.

The tax--

Unknown Speaker: What are they?

They're not a department and they're not a court of law.

Ms Sullivan: --It may be that Congress should not... in the Government's view perhaps in other view... people's view... perhaps Congress should not create entities that are outside the tripartite structure of Government but it has.

Unknown Speaker: Well, maybe they shouldn't have.

What is your view as to the status of these tribunals?

Ms Sullivan: Congress moved it out of the executive branch in 1969.

It cannot be in the executive branch.

Congress did not put it in the judicial branch.

It is not in the legislative branch.

It is neither executive, judicial, nor legislative.

Last point, we don't necessarily--

Unknown Speaker: That... that's like the FCC and the independent regulatory agencies who are considered... who are considered heads of... heads of departments.

They have their chairman on it.

Ms Sullivan: --They might well be.

Key point in our case is that the legislative courts are not the same thing as the independent agencies.

The Government's main argument is not that the Constitution has been complied with here.

It's that if the Constitution were complied with, the Government says the FCC, the FTC, the SEC might lose their appointment power.

Well, that's just not so.

The legislative court known as the tax court is distinct from the agencies in very significant ways.

It's budget goes straight to Congress, not through OMB.

It elects its own chief judge.

The President hand-picks the chairmen of the agencies and can be expected to control them.

We respectfully request that the case be reversed and remanded for a new trial before the--

Unknown Speaker: Thank you, Ms. Sullivan.

Ms Sullivan: --regular tax court judge.

Thank you.

Unknown Speaker: Mr. Roberts, we'll hear now from you.

Justice Roberts: Mr. Chief Justice, and may it please the Court:

Petitioners claim that the appointment of a special trial judge to hear and report on their cases which is authorized by the plain language of section 7443A(b)(4) is unconstitutional under the appointments clause.

There are two reasons that this Court should not reach that claim.

First, petitioners waived it by consenting to have their cases heard by a special trial judge in the tax court and waiting to raise their claim until it reached the court of appeals, which quite properly declined to consider it.

Second, the special trial judge assigned to hear and report on petitioners' cases under subsection (b)(4) performed duties that may be performed by an employee and do not require an officer of the United States.

The appointments clause is therefore not implicated on the facts of this case.

First, the waiver point.

When the regular tax court judge became too ill to continue hearing petitioners' cases, the chief judge did not simply reassign the cases to a special trial judge.

He issued an order proposing such a reassignment and inviting any objections.

Hearings were held to consider objections.

Petitioners, represented by counsel, discussed with the chief judge the issue of reassignment and settled upon terms under which they would consent to the reassignment.

One taxpayer did object, and his case was severed.

Petitioners never did object.

And even after the tax court decision, in two motions to reconsider, never once raised the appointments clause problem.

Now, the reasons for a waiver rule I think we've seen this morning--

Unknown Speaker: Well, Mr. Roberts, I guess the first part of the argument here today went to the statutory argument, and as to that it was asserted that there was no waiver of the argument that the tax courts own rules are improper.

Justice Roberts: --Your Honor, the petitioners did waive that argument as well in a sense that they did not raise it before the tax court.

The Fifth Circuit however went on to consider it.

And therefore, under the rule that matters, although not raised, are actually decided... may be reviewed, we agree that that question may be reviewed.

We think it's--

Unknown Speaker: So that question is before us, and do you... are you going to address yourself to part (c) of the rule that says the findings of fact recommended by the special trial judge shall be presumed to be correct?

Justice Roberts: --I'll do so right now, but before I do so would point out that that issue is a very good indication of why we have a waiver rule.

The question of how the tax court interprets its rule 183, how a regular tax court judge handles the report of a special trial judge when he gets it, are all matters that the tax court could have definitively resolved if it had been asked to do so.

Instead, because of petitioners' default, this Court is asked to decide that... those questions of technical tax court procedure in the first instance and in a decisional vacuum.

Now--

Unknown Speaker: At what point would it have done so?

On a petition for a rehearing after Judge Sterrett's decision?

Justice Roberts: --Well, petitioners today argue that rule 183(c) prevents the tax court from exercising de novo review.

Now, if that's the case, they should have known that when the Chief Judge proposed to reassign their case to a special trial judge for hearing a report under rule 183(c).

The rule said the same thing then as it does today, and yet they raised no objection at that point.

That was their opportunity to do so.

They had an opportunity to do so also after the decision in two different motions to rehear.

Unknown Speaker: Mr. Roberts, before you get into the substance, what about the argument that you didn't cross appeal... that the... that the court of appeals did decide the waiver point, decided against you, and you didn't cross appeal?

Justice Roberts: It decided two waiver points.

One, the issue they permitted petitioners to raise in the court of appeals was whether or not this type of a case can be assigned under subsection (b)(4) to a special trial judge for hearing and report.

Petitioners' argument was (b)(4), which says any other proceeding actually means any other small proceeding like the ones in (b)(1)... (b)(1) through (3).

They permitted them to raise the issue.

So that one is not... not waived.

But the Fifth Circuit did not decide petitioners' constitutional claim.

They quite properly decided that that was waived.

Now, to return, Justice O'Connor, to rule 183, and in particular (c).

There is a last sentence to the rule, but there's a first sentence as well.

The first sentence describes what a regular tax court judge is to do with the special trial judge's report.

And it says he may adopt it.

He may modify it, reject it, call for briefing, call for oral argument.

He may receive additional evidence or may recommit the report with instructions.

That in our mind indicates, as section 743A(c) makes clear, that it is the regular tax court judge and not the special tax court judge who decides the case.

That reading is confirmed by the fact that the interaction between the regular tax court judge and the special trial judge is a matter that is purely internal to the tax court.

It... petitioners object that they didn't have an opportunity to review the report before it went to the regular judge.

They didn't have--

Unknown Speaker: Mr. Roberts, surely what matters is what he must do, not what he may do.

Is it enough to say that he may decide the case himself if he wants to?

Justice Roberts: --He is--

Unknown Speaker: It seems to me, to support your position, you have to say he must.

Justice Roberts: --He must, and--

Unknown Speaker: I know all this is... all the sentence you rely on just says he may.

Justice Roberts: --No, section--

Unknown Speaker: Whereas the last sentence says, due regard shall be given to the circumstance of the special trial judge had the opportunity to evaluate... blah, blah, blah... and the findings of fact shall be presumed to be correct.

Justice Roberts: --The sentence that I read says may because it lists a number of things, including some that are inconsistent that he may do.

He may adopt it; he may reject it.

The statute, after setting forth the categories of cases that the Chief Judge may authorize a special trial judge to hear, says that in the first three categories the chief judge... the court may also authorize the special trial judge to decide the case.

He may--

Unknown Speaker: Well, Mr. Roberts, just... if we thought that the last sentence of that rule required the tax court division to which the report is assigned to give the special trial judge's recommendations a presumption that they are correct... a clearly erroneous standard of review... now, if that... if that is our reading of it, is that consistent with the authorizing statute?

Justice Roberts: --Well, with respect, there are two different points in your question.

There's a difference I believe between a presumption of correctness and a clearly erroneous standard of review.

Unknown Speaker: Take them both.

Justice Roberts: I--

Unknown Speaker: Is... are they consistent with the statute?

Justice Roberts: --The first is.

The rule says that the findings of fact shall be presumed to be correct.

The rule does not say what it takes to overcome the presumption.

The tax court has.

In its Rosenbaum decision, it's indicated both by what it says... said, which is that the language does... in no impairs or dilute their responsibility, and by what it did, which was a reweighing of the evidence in the case and in many instances reaching a conclusion different from that of the special trial judge.

The tax court has indicated that it reads its rule as proposing... as... the presumption is in effect as we said a starting point from which the tax... the regular tax court judge must consider the proposed findings of the parties.

Now, as I've indicated... given the fact that the interaction between the regular tax court judge and the special trial judge--

Unknown Speaker: Are the proposed findings of the parties submitted to the special trial judge?

Justice Roberts: --Yes, Your Honor.

And--

Unknown Speaker: Mr. Roberts--

Justice Roberts: --And they're, of course, available and go on to the regular judge when he's reviewing.

Unknown Speaker: --At a minimum, Mr. Roberts,

"shall be presumed to be correct. "

means that if everything else is in equipoise, what the... what the special trial judge found prevails.

Doesn't it mean that at a minimum?

Justice Roberts: If it's... if it's a straight tie, then that's what it... that's what it means.

Yes.

Unknown Speaker: Right.

I see.

Is that consistent with the statute?

Justice Roberts: Yes, I believe it is, because I don't think that type of review is abdicating responsibility in any way for a decision.

Now, of course, it has to also take into account--

Unknown Speaker: He in effect decides the case then.

Justice Roberts: --Well--

Unknown Speaker: If what he says goes.

Justice Roberts: --Well, no--

Unknown Speaker: If everything else is in--

Justice Roberts: --because it also has to be evaluated with the... with the... the burden of proof.

One of the parties bears the burden of proof.

And if that party has not carried its burden of proof, if it is an exact tie, then the other party would prevail.

Now--

Unknown Speaker: --Suppose the tax court judge said in exercising my determination whether to reject or accept this depart... this report, I must keep in mind that it is presumed to be correct.

Is that a proper interpretation of the regulation?

Justice Roberts: --Certainly.

It's just... it's just reechoing the rule.

The question is what does somebody--

Unknown Speaker: So that he... so that he must presume it correct before he exercises his discretion to reject it or adopt it?

Justice Roberts: --The question is what weight is given the presumption, and that's not a uniform rule.

Presumed correct doesn't necessarily mean the same thing across the board.

It's the tax court rule.

The place you look to find out what the presumption means is the ruling of the tax court.

And that court has indicated that the presumption is not... certainly not the clearly erroneous standard, but more in the nature, as I said, of a starting point.

And again to get back to the relationship between the regular tax court judge and the special trial judge, it is internal.

Petitioners object, we never had a chance to review the report.

We never had a chance to object to it.

And they say that's very different than the procedure that applies with respect to magistrates.

That's our point exactly.

A magistrate decides a matter that he is... he is hearing... a civil trial.

And therefore, the parties need to be able to review that decision to determine if they want to object and seek further review.

Special trial judge under subsection (b)(4) decides nothing, and therefore, it's perfectly appropriate that there is no opportunity for review and objection, just as there is not an opportunity for a party to review and object to a law clerk's draft that is... that is submitted to a judge.

A law clerk acts as an aide and assistant to the judge, just as a special trial judge does to a regular judge under this provision.

Unknown Speaker: Of course you don't submit proposed findings to a law clerk.

Justice Roberts: Well, I suppose in the district court it's not unusual to have proposed findings submitted to a court, and then a law clerk could do a draft of those and submit it to his judge, who of course has the responsibility for decision.

And--

Unknown Speaker: What does it mean... due regard shall be given to the circumstance of the special judge have the opportunity to evaluate the credibility of witnesses?

Justice Roberts: --Well--

Unknown Speaker: What does it mean to give due regard to that?

Doesn't that mean that you... you defer to... to the finding of fact?

Justice Roberts: --No.

Unknown Speaker: If it doesn't mean that, it's meaningless, isn't it?

Justice Roberts: Well, it may well be meaningless in the sense that the regular judge always the retains the responsibility to decide the case.

Due regard means due regard.

And what the tax court has said, as it understands its rule, that this in no way dilutes or impairs--

Unknown Speaker: Oh, I see.

I see.

Justice Roberts: --their responsibility to decide the case.

Unknown Speaker: I see.

You think due regard means no regard?

[Laughter]

Justice Roberts: No, I think due regard means due regard.

And in... and in the case of credibility determination, the regular tax court judge will give due regard.

But he gives regard in such a way, as the tax court has made clear... and this is a decision for the tax court in interpreting its rules... does not impair or dilute the regular judge's responsibility to decide the matter.

Unknown Speaker: But he's not... he's not going to interview the witnesses.

To give due regard to that individual's ability to see the witnesses is to defer to that... to that individual's judgment.

And nobody would read it in any other way.

Justice Roberts: Well, with respect, Your Honor, the tax court has, and the Rosenbaum decision is a good example.

There they went through and overturned findings of the special trial judge on credibility matters.

Now, they were reversed by the D.C. Circuit in the Stone case precisely because they said, you didn't give enough deference. But--

Unknown Speaker: But the good [inaudible], which their rule requires, I'd reverse them, too.

Due regard means due regard, not no--

Justice Roberts: --Absolutely not, Your Honor, because the tax court has not acquiesced in the Stone decision.

It of course is a national court, and it said the Stone court got it wrong.

We don't review this under a clearly erroneous standard.

And they shortly thereafter changed their practice so that it is now purely internal and confirms the relationship between the regular tax court judge and the special trial judge.

Unknown Speaker: --Well, Mr. Poberts, to get back to my question, which you never did answer, suppose it does mean it's reviewed under a clearly erroneous standard.

Would that violate the authorizing statute in your view?

Justice Roberts: I think it might well, Your Honor.

Unknown Speaker: Okay.

Justice Roberts: In the sense that a clearly erroneous standard is closer... the statute requires that the regular tax court judge in this category of cases make the decision.

Unknown Speaker: Yes.

Justice Roberts: And I think under a clearly erroneous standard that may be abdicating too much of his statutory responsibility.

Unknown Speaker: Well, what if it's just a presumption?

Justice Roberts: Well, if it's a presumption of the sort that it is here, as the tax court has told us... essentially that means that's where you start... now, let me see what the evidence is, let me review the matter... then it's perfectly consistent with the statutory language.

But I would like to point out that the case has evolved somewhat even today.

If petitioners' objection was that rule 183(c) was invalid, it seems a curious way to proceed in raising that objection to raise an appointments clause problem.

If a... for example, by analogy if a district court judge was allowing his or her law clerk to do all the work and then just rubber-stamping everything, I don't think our first reaction would be that that violates the appointments clause because the law clerk hasn't been appointed by the President and confirmed by the Senate.

No.

We'd say that what the district court is doing is wrong.

And the way you correct things that a district court does that is wrong is you appeal.

Now, the questions presented--

Unknown Speaker: Well, I take it there would be some concern if there was a rule that the law clerk's draft was presumed correct.

I mean, they might think so.

[Laughter]

Justice Roberts: --I recognize I'm... as treading on sensitive grounds but--

[Laughter]

--if the presumption... if the presumption is simply that this is a starting point and now the judge... I'm going to look at everything, I think that that would still be fine.

But the questions presented before this Court do not say that rule 183(c) of the tax court's rules is invalid.

That's not subsumed within... within the questions presented.

Now, what a special trial... tax court judge does, apart from hear... submitting the report, is of course conduct... preside at the hearing.

His duties in that respect are in no instance greater than the duties of the special masters that this Court regularly and routinely appoints in cases.

We know that those special masters are employees.

They cannot be officers of the United States, because Congress has not, by law, vested that appointment authority in this Court.

And therefore, by analogy the special trial judge is also an employee in... when he performs those responsibilities.

Unknown Speaker: I'm trying to think, Mr. Roberts... and not since I've been here anyway... but do we ever, when we have a special master here in original case and the parties don't agree with the disposition of the special master, do we ever adopt the decision of the special master without giving a hearing?

Justice Roberts: I don't know either way, Your Honor.

The--

Unknown Speaker: I think we don't.

Justice Roberts: --Well, in this case, of course--

Unknown Speaker: Before the Court.

Justice Roberts: --Before the Court.

In this case, of course, the same power is available to a regular judge.

He can call for oral argument.

He can call for additional evidence which is a feature that is plainly inconsistent with any clearly erroneous standard of review that I'm... of which I'm aware.

That usually is restricted to the record before the reviewer.

Here he can call for additional evidence, if he needs more evidence.

And he can just send it back and say, you know, try again and start over.

Now, the special trial judges have other duties that are not at issue in this case.

Under (b)(1) through (3) they may be authorized to decide the matter.

But petitioners cannot rely on that statutory provision.

They have not been injured by any assignment under (b)(1) through (3).

They have no standing to object to that.

The Buckley case, Buckley v. Valeo, makes clear that in considering appointments clause challenges, you look to the particular duties that are being challenged.

In that case, the court held that the Federal Elections Commission was improperly constituted under the appointments clause.

But it also said that the FEC as constituted could continue to perform certain of its responsibilities... those that did not require an officer of the United States.

So whether or not an officer of the United States is required under (b)(1) through (3), it is not required under (b)(4), and that is the only provision that is at issue in this case.

Now, if the Court disagrees with us on the waiver point, and if the Court disagrees with us on the employee point, it will then be necessary to reach the constitutional issue.

And our position is that the section 7443A(b)(4) is not unconstitutional--

Unknown Speaker: May I back up just a second?

You're saying because... that they don't have standing to challenge the status of the officer because, even if duties under (1), (2) and (3) would have been required... were performed by an officer of the United States, but if this assistant judge is performing those duties, the appointment would be invalid, wouldn't it?

Unless there... I mean... the constitutional issue would be presented as to... I don't quite understand why you're saying they don't have standing to make that argument.

Justice Roberts: --Because the duties that are required... that require an officer of the United States... an officer of the United States can perform duties that do not require an officer that may be performed by a mere employee.

And that is the case certainly we think with respect to (b)(4)--

Unknown Speaker: Oh, I see your... I see what you're saying.

Justice Roberts: --does not require an officer... and therefore, that he may do other things which he did not do in this case that require an officer... don't give them standing to complain about those.

If the Court does reach the constitutional question, and I would urge the Court not to because there are available certainly the waiver point and the employee's point... and the constitutional question is a very sensitive one that goes to the core of our structure of Government, and would be a peculiarly inappropriate case for the Court to reach out and decide that issue.

But if the Court does go ahead and do that, we believe that the appointment can be sustained because the chief judge of the tax court is the head of a department in the executive branch.

In Buckley v. Valeo, to cite the case again, the court, referring to the appointments clause, said that the departments referred to are themselves in the executive branch or at least have some connection with that branch.

As the Second Circuit recently held unanimously in the Samuels, Kramer case, the tax court fits within that definition.

We know it's not in the legislative branch.

We know that it's not an article III court.

Unknown Speaker: Now the Government take... now take the same position with respect to all these other courts that I referred to before?

District of Columbia, territorial courts... all those are in the executive branch?

Justice Roberts: Your Honor, each case has to be considered on--

Unknown Speaker: I understand.

Justice Roberts: --on its merits.

I think with respect to the territorial courts and the District of Columbia courts, there Congress is acting pursuant to its authority to establish local governments.

Unknown Speaker: Right.

Justice Roberts: So the clause may not apply directly.

The claims court is a particularly unique entity because it may well be an adjunct of the court of appeals for the Federal circuit, which has the authority to remove claims court judges.

Unknown Speaker: Well, tell me again why the different power of Congress is exercising... creating the District of Columbia courts and territorial courts... but why does that make the appointment clause issue any different?

Justice Roberts: Well, because we don't... because Congress in those instances has the authority to establish a local government, and a local government that need not comply with the tripartite separation of powers in the Federal Government.

Those entities... it may difficult to classify them as either executive--

Unknown Speaker: Well, you don't think that Congress could... or maybe you do... appoint a territorial governor?

Justice Roberts: --No.

I think in that instance the appoint... when the Federal entity is doing the appointment, the appointments clause applies with full force.

The question would be could Congress authorize the territorial court in a territory to then make an appointment.

And I think there because the territorial court may well be equivalent of a State court, a local entity, the appointments clause may not apply.

But when it's the Federal Government itself making the appointment, it applies in full force.

And no, the Congress could not appoint territorial officials.

Unknown Speaker: But I don't understand your answer to Justice Kennedy.

If the appointment clause doesn't apply, why couldn't Congress appoint the... a governor of the territory?

Justice Roberts: Well, I think it does apply in that instance, because it would do violence to the... to the separation of powers that is at the base of the appointments clause.

The question is sort of the... further on down the road, is... does the appointments clause apply to the appointing activities of the territorial entities.

And because I think they may well be creatures that don't fit into the tripartite system, because they partake of the local governing authority, that the clause may not apply.

Unknown Speaker: Then Congress could appoint the staff of the governor and the staff of the court.

Justice Roberts: No, Congress could authorize the court to appoint its staff even though we may have trouble saying that that's an executive department or a court of law.

But I think when Congress is doing the appointing, it still must act consistent with the appointments clause.

Unknown Speaker: Well, are you resting on the appointments clause or just a concept of congressional power?

Justice Roberts: Well, it's an... it's an interplay between the appointments clause and Congress' powers with respect to the territories and the District of Columbia which gives rise to creatures that are hard to fit into the terms of the appointments clause.

Now--

Unknown Speaker: Well, the appointments clause gives some power of courts of law to make appointments.

Do you think, as for the territorial courts, they could have authorized this Court to appoint the clerk of the territorial courts?

We're certainly a court of law.

Justice Roberts: --I don't see any objection to that, no.

I think they could have.

Now, if the tax court is going to exist as a constitutional entity, it must be in the executive branch, because there are only three branches.

Petitioners are correct.

That is our view.

And we know that it is not in the legislative branch, and it is not an article III court.

They say that it... there are reasons to doubt were their words in their reply brief... that it's in the executive branch because it performs adjudicatory functions.

But it adjudicates public rights cases that Congress may leave within the executive under Murry's Lessee, which was itself a tax case.

Now, it's easy, of course, to visualize what the tax court does as being adjudicatory.

It looks, acts like a court.

But it's also quite simple, as is the case in all... in every public rights' case to visualize what the tax court does as being purely executive.

There are officials in the Internal Revenue Service who sit down and decide what a taxpayer owes the Government.

And the tax court, for its formality and separation, is really another level of that, which--

Unknown Speaker: Well, is it absolutely certain and... and have... has this Court ever decided that the term courts of law in the appointments clause is of necessity the same as an article III court?

Justice Roberts: --No, it is an issue of first impression before--

Unknown Speaker: Right.

Justice Roberts: --this Court as I understand it.

I think it's... was correctly decided that way by the Second... Second Circuit recently.

It says the Courts of Law... capital C, capital L... which strikes me as... that naturally refers to the courts of law established under the constitution.

Now, petitioners as we understand it do not dispute that the tax court was in the executive branch prior to 1969.

The question becomes, what happened in 1969 that made it any different?

Congress took language that said this is an agency in the executive branch and substituted language saying this is a court of record under article I.

We agree with the Second Circuits recent decision that what they did was change the label.

They didn't purport in the statute to move the tax court outside the executive branch and didn't purport to put it in any other branch.

The legislative history did say... not the statute, the legislative history... we think that the tax court should be considered an article I court rather than an executive agency.

To our way of looking at it, that's like saying something should be considered an orange rather than a fruit.

It's both.

There... the article I court... quite happy to call it that... but it remains in the executive branch.

And we think that's confirmed by the fact that in 1969, Congress continued the incumbent tax court judges in office.

If Congress were doing something as dramatic as moving the tax court out of the executive branch and placing it somewhere else, it plainly would have no authority to continue those judges in office.

That would be an appointment from one entity to another.

But it did not do that.

It continued them, and quite properly so because it was not moving it from one branch to another.

Unknown Speaker: What are--

--Is it--

--What are the consequences of saying it's still in the executive branch?

Does that mean the Administrative Procedures Act applies and--

Justice Roberts: It may--

Unknown Speaker: --the Freedom of Information Act and so forth and so on?

Justice Roberts: --Those--

Unknown Speaker: All the things Congress tried very hard to prevent.

Justice Roberts: --Well, they may or may not, Your Honor, and it depends on an evaluation of the statute in '69 and of the Administrative Procedures Act.

Congress did not try very hard to prevent that, because they didn't say anything about that in the statute.

If they don't want the Administrative Procedures Act to apply, it's an... there is an easy way to reach that result.

The Administrative Procedure Act now defines an agency not to include courts of the United States.

It would be a simple... maybe not simple... but a pure question of statutory interpretation whether that excluded article I courts, and it may well.

Unknown Speaker: May I ask how is the chief judge of this court appointed?

Justice Roberts: The chief judge is elected by the regular judges on a--

Unknown Speaker: And is that... is that a valid method of appointing a head of a department in the executive branch?

Justice Roberts: --No challenge has been raised to that--

Unknown Speaker: Well, I know no challenge has been raised, but under your argument it is clearly invalid, is it not, because the appointment was not made by the head of a department?

Justice Roberts: --Well, it would have to be considered, not only a separate office, but what the chief... the... the attributes of the chief judge that are different from--

Unknown Speaker: Well, surely the chief judge is an officer of the United States.

Justice Roberts: --The chief judge is an officer of the United States.

The question is is the difference between the chief judge and a regular judge, does that require a--

Unknown Speaker: Well, it gives him the authority to appoint assistant trial judges.

Justice Roberts: --Yes.

Unknown Speaker: That's pretty importance difference, I guess.

Justice Roberts: Well, it is... it is a difference.

It is not, as I say... it has not been presented or briefed--

Unknown Speaker: But under your argument it is clear that the present appointment of the chief judge of the court is invalid I think?

Justice Roberts: --Well, with respect, Your Honor, I'm not sure that that is clear.

It's an issue that has not--

Unknown Speaker: I know it hasn't been raised, but I'm trying to think of the implications of accepting your argument.

Justice Roberts: --Well, we would have to look at all the added authority--

Unknown Speaker: Can you give me a reason why, consistent with your argument, that the appointment could be valid... the appointment by his colleagues as chief judge?

Justice Roberts: --Well, one question would be is whether or not his additional authorities are such as require a separate appointment.

Unknown Speaker: I see.

Justice Roberts: And it may be, for example, that the head of a collegial body does not have to have a separate appointment particularly here where the collegial body acts together in electing him.

He may be more in the nature of a... I don't know if it's a chairman or... or a--

Unknown Speaker: But not a head of a department with authority to appoint assistant trial judges?

Justice Roberts: --Well, he is clearly the head of this... of this department.

There's no question about that.

He doesn't--

Unknown Speaker: He became head by collegial action that did not have to comply with the appointments clause?

Justice Roberts: --Well, it's a complicated question... answer, but perhaps... and I'm thinking--

Unknown Speaker: A question we can entirely avoid if we assume it's a court of law.

Justice Roberts: --Well, I suppose the question of the chief judge's validity is avoided, but not the question that's before this Court today.

It may be that with respect to... that the tax court as a whole can accept the appointment authority for their chief, but that the chief judge, once appointed, can act as the head of a department.

In other words, the tax court as a whole may be the head of a tax court for the purpose of selecting the chief judge.

But the chief judge himself then is the head of the department for things that only he can do, such as appoint special trial judges.

Chief Justice Rehnquist: Thank you, Mr. Roberts.

The case is submitted.

Print this transcript Transcript: 

Argument of Speaker

Mr. Roberts: The opinion of the Court in No. 90-762 Freytag against the Commissioner of Internal Revenue will be announced by Justice Blackmun.

Argument of Justice Blackmun

Mr. Blackmun: This case comes to us from the Court of Appeals for the Fifth Circuit.

It is an important case for those concerned with governmental structure or it has to do with separation of powers, but perhaps it has little appeal by way of a bench announcement for those who are not so interested.

The litigation centers in a statute that authorizes the Chief Judge of the United States Tax Court to appoint special trial judges.

Under the statute, he may assign to them certain specified matters and “any other proceeding he may designate.”

And as to the latter of this special trial judge may only hear the case and prepare the proposed findings in an opinion but the actual decision is then rendered by the Tax Court judge.

The petitioners here sought re-determination of the Tax Court of approximately one and a half billion dollars in asserted federal income tax deficiencies.

There are cases where assigned to a Tax Court judge but were later reassigned to a special trial judge.

His unfavorable opinion was adapted by the Chief Judge as the opinion of the Tax Court.

The Fifth Circuit rejected petitioner’s arguments that the assignment of a complex case to a special trial judge was not authorized by the statute and that the assignment violated the appointments clause of the constitution which limits congressional discretion to vest the appointment of so-called inferior officers to the president, the heads of departments, and the courts of law.

We affirm that judgment.

We hold hat the statute authorizes the Chief Judge to assign any Tax Court proceeding regardless of complexity or amounted controversy to a special trial judge.

Its plain language which contains no limiting term restricting its reach.

We also hold that the statute does not transgress the structure of separation of powers embodied in the appointments clause.

Such power can be vested in the Chief Judge only if his court falls within one of the three repositories that the clause specifies.

Congress obviously did not intend to create or to grant the president the power to appoint special trial judges, and the term department refers only to cabinet level departments.

An article one court such as the Tax Court, however, is a court of law within the meaning of the clause and that is the answer to the issue in the case.

Justice Scalia has filed an opinion concurring in part and concurring in the judgment and is joined by Justice O’Connor, Justice Kennedy and Justice Souter.