author: CHAMBERS, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. John Lee BOWEN, Appellant.
    No. 72-1012.
    United States Court of Appeals, Ninth Circuit.
    Oct. 23, 1973.
    Michael D. Nasatir (argued), Nasatir, Sherman & Hirsch, Beverly Hills, Cal., for appellant.
    Shelby R. Gott, Asst. U. S. Atty. (argued), Harry D. Steward, U. S. Atty., Stephen G. Nelson, Asst. U. S. Atty., San Diego, Cal., for appellee.
    Before CHAMBERS, MERRILL, KOELSCH, BROWNING, DUNIWAY, ELY, HUFSTEDLER, WRIGHT, TRASK, CHOY, GOODWIN, WALLACE and SNEED, Circuit Judges.
   ORDER.

A majority of the judges of this court in active service have voted to hear the above case en banc on December 11, 1973, at 1:30 P.M. If counsel desire to submit additional briefs, such briefs must be filed in the Clerk’s Office of this Court no later than November 15, 1973.

Argument will be in Courtroom No. 1 in the United States Court of Appeals and Post Office Building, Seventh and Mission Streets, San Francisco.

(Circuit Judge Chambers will file a dissent to the foregoing order.)

CHAMBERS, Circuit Judge

(dissenting) :

I dissent from the order for en banc. At issue is the retroactivity of Almeida-Sanchez v. United States, 411 U.S. 903, 93 S.Ct. 1531, 36 L.Ed.2d 192 (1973). Also involved in Bowen under Almeidcc-Sanchez is the status of an intermittent but fixed checkpoint.

I would let the panel, [9 Cir., 462 F.2d 347] decide the case. None of the earmarks of the normal case for en banc are here.

It is inescapable that the Supreme Court will decide the questions here. They are too big and too far reaching for that Court to ignore them.

This en banc hearing results in about a three-months’ delay in the case getting to the Supreme Court. Meanwhile, two or three district courts are almost choked with the retroactive question. Thus, knowing our decision means little in this instance, I was prepared to live with any decision the panel might render.

Taking this case en banc is simply flying off into the air without a payload.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    Dericksen M. BRINKERHOFF, etc., et al., Appellants, v. AMFAC, INC., et al., Appellees.
    No. 73-2365.
    United States Court of Appeals, Ninth Circuit.
    Sept. 13, 1973.
    Bruce W. Kauffman, David H. Pittinsky, Carl H. Hanzelik, William T. Coleman, Jr., Dilworth, Paxson, Kalish, Levy & Coleman, Philadelphia, Pa., Alexander Kahan, New York City, Asa M. Akinaka, Honolulu, Hawaii, Kenneth P. Kimmel, Beverly Hills, Cal., for appellants.
    Martin Gendel, Richard S. Berger, Gendel, Raskoff, Shapiro & Quittner Alfred I. Rothman, Loeb & Loeb, Los Angeles, Cal., James W. Rosenquist, Orrick, Herrington, Rowley & Sutcliffe, San Francisco, Cal., Roger Jon Diamond, Mervyn L. Hecht, Pacific Palisades, Cal., Samuel Gates, Irwin J. Sugarman, Debevoise, Plimpton, Lyons & Gates, New York City, Douglas E. Prior, Cades, Schutte, Fleming & Wright, Paul A. Lynch, Gerald Y. Sekiya, Bortz, Case, Stack, Kay, Cronin & Clause, Howard K. Hoddick, Anthony, Hoddick, Reinwald & O’Connor, William A. Stricklin, Conroy, Hamilton, Gibson, Nickelsen & Rush, Honolulu, Hawaii, for appellees.
    Before KOELSCH, HUFSTEDLER and WALLACE, Circuit Judges.
   OPINION

PER CURIAM:

Although appellants insist that they seek only to attack Judge Pence’s construction of Judge Tavares’ instructions to the appraisers, it is evident that the attack would be pointless unless the real aim were to upset the valuations reached by the court-appointed appraisers. Appellants recognize, or they must, that they are in a situation directly analogous to one who seeks to upset an arbitration award. Accordingly, their only hope in turning over the “award” is to claim that it was the product of extrinsic fraud or that the “arbitrators” exceeded the scope of the submission and thus acted outside their jurisdiction.

To the extent that extrinsic fraud was charged, Judge Pence found against the appellants and there is no basis in the record to upset that determination.

We have examined Judge Pence’s construction of Judge Tavares’ instructions to the appraisers, and we have concluded that Judge Pence did not err in his interpretation of them.

Appellants are understandably distressed by the valuations reached by the appraisers. Unfortunately for appellants, the scope of judicial review available to them on the basis of their stipulation and the orders of the court predicated upon their agreement is far more restrictive than that which would have been accorded without the settlement agreement.

The motion to dismiss the appeal is denied. Sanctions are denied. The judgment is forthwith affirmed.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Roosevelt BELL, aka Jerry Wade, aka Jerry Love, aka Mr. T. Wilson, Defendant-Appellant.
    No. 73-2740
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Nov. 15, 1973.
    George W. Reese, George M. Leppert, New Orleans, La., for defendant-appellant.
    Gerald J. Gallinghouse, U. S. Atty., Stephen A. Mayo, Asst. U. S. Atty., New Orleans, La., for plaintiff-appellee.
    Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.

       Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir., 1970, 431 F.2d 409, Part I.

   PER CURIAM:

A careful study of the briefs and a complete review of the record reveal no reversible error in the trial of this case and sufficient evidence to support the jury verdict.

Affirmed.


text:
    AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Plaintiff-Appellee, v. FLORIDA-TEXAS FREIGHT, INC., Defendant-Appellant.
    No. 73-2425
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Nov. 12, 1973.
    Richard P. Kenney, Miami, Fla., for defendant-appellant.
    Sherryll M. Dunaj, Miami, Fla., for plaintiff-appellee.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprses, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

For reasons cogently expressed in the district court opinion, 357 F.Supp. 977 (1973), we affirm.

Affirmed.


author: BENNETT, Judge:

text:
    The QUINAULT ALLOTTEE ASSOCIATION and Individual Allottees Jennie Boome et al., v. The UNITED STATES.
    No. 102-71.
    United States Court of Claims.
    Oct. 17, 1973.

      Charles A. Hobbs, Washington, D. C., attorney of record, for plaintiffs; Wilkinson, Cragun & Barker, and R. Anthony Rogers, Washington, D. C., of counsel.
    Herbert Pittle, Washington, D. C., with whom was Asst. Atty. Gen. Kent Frizzell, for defendant.
    Before COWEN, Chief Judge, DUR-FEE, Senior Judge, and DAYIS, SKELTON, NICHOLS, KUNZIG and BENNETT, Judges.
    ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFFS’ CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT
   BENNETT, Judge:

The individual members of the class of plaintiffs are owners of interests in Indian land trust allotments on the Quinault Reservation in the State of Washington. The lands are on the Pacific Coast side of the Olympic Peninsula. Plaintiffs contend that the United States, in deducting administrative charges from the proceeds of timber sales on the various allotments, interfered with their vested right not to be subject to any charges assessed on the trust allotments. Plaintiffs seek to recover the total of such charges collected since 1922, the amount to be determined later, together with interest, on alternative theories of a Fifth Amendment taking, a breach of fiduciary duty, and a breach of contract. Plaintiffs invoke our general jurisdiction under 28 U.S.C. § 1491. The court concludes, however, that plaintiffs’ action must be dismissed since the charges in question were authorized by law, were validly assessed by the United States and violated no treaty, contract or fiduciary duty.

It was the avowed policy of the United States in the mid-1800’s to remove Indian tribes from wide areas of the Pacific Northwest in order to make way for white settlers. Pursuant to this policy, in 1855, Isaac Stevens, Governor and Superintendent of Indian Affairs of the Washington Territory, began negotiations with the fish-eating tribes living on the west coast of the Territory. The negotiations culminated in a treaty-signed only by the Quinaults and Quileutes on July 1, 1855, and by Governor Stevens on January 25, 1856, 12 Stat. 971 [ratified March 8, 1859; proclaimed April 11, 1859], Known as the Treaty of Olympia, parts thereof, which are pertinent here, are as follows:

ARTICLE I. The said tribes and bands hereby cede, relinquish, and convey to the United States all their right, title, and interest in and to the lands and country occupied by them, -X* *
ARTICLE II. There shall, however, be reserved, for the use and occupation of the tribes and bands aforesaid, a tract or tracts of land sufficient for their wants within the Territory of Washington, to be selected by the President of the United States, and hereafter surveyed or located and set apart for their exclusive use, * * *
* * * 4Í- * *
ARTICLE VI: The President may hereafter, * * * at his discretion, cause the whole or any portion of the lands to be reserved, or of such other land as may be selected in lieu thereof, to be surveyed into lots, and assign the same to such individuals or families as are willing to avail themselves of the privilege, and will locate on the same as a permanent home, on the same terms and subject to the same regulations as are provided in the sixth article of the treaty with the Omahas [10 Stat. 1043], so far as the same may be applicable.

Article VI of the aforesaid Omaha Treaty provided the details of the method of allotment to single Indians and Indian families and for forfeiture of an allotment if an allottee neglected his land, refused to occupy it, or abandoned it and wandered from place to place. The President of the United States was authorized, in his discretion, to issue patents for assigned land, conditioned on the agreement that such land would not be aliened or leased for periods longer than 2 years. It was also provided that the land should be exempt from “levy, sale, or forfeiture” until such time as a state legislature should remove the restrictions with consent of Congress. 10 Stat. 1045 (1854). The restrictions have never been removed. The validity of this restraint upon alienation was upheld as to both land and standing timber in Starr v. Campbell, 208 U.S. 527, 28 S.Ct. 365, 52 L.Ed. 602 (1908).

In accordance with Article II of the Quinault (Olympia) Treaty supra, a 10,000-acre reservation was set aside for the Quinaults and other Washington Territory tribes in 1861. This tract proved unappealing, however, on account of its limited size and heavy concentration of timberland. The tract included only a small amount of land suitable for farming or grazing. As a result, the Quinault Agency superintendent suggested that since the coastal tribes of southwest Washington drew their sustenance almost entirely from the water, such tribes should be collected on a reservation suitable for their fishing needs. This recommendation led to an order, issued by President Grant on November 4, 1873, designating approximately 220,000 acres of the Washington coast as an Indian reservation. The order provided that:

In accordance with the provisions of the treaty with the Quinaielt [Quinault] and Quillehute [Quileute] Indians, concluded July 1, 1855, and January 25, 1856 * * ", and to provide for other Indians in that locality, it is hereby ordered that the following tract of country in Washington Territory * * * be withdrawn from sale and set apart for the use of the Quinaielt, Quillehute, Hoh, Quit, and other tribes of fish-eating Indians on the Pacific coast, * * *. [Executive Orders Relating to Indian Reservations from May 14, 1855 through July 1, 1912, G.P.O., p. 206 (1912).]

Not as many Indians as expected moved to the new reservation following the 1873 proclamation. Many tribes chose to stay on their older and smaller reservations or ancestral homelands. This reluctance to move to the new reservation was not shortsighted, however, since only 2 percent of the 220,000-acre reservation was suitable for cultivation or for homesites. The great expanse of the 220,000-acre tract was, and still is, rain forest covered with huge, coniferous trees, some several hundred years old. Settlement on the tract was impossible except in random clearings where those Indians moving to the tract formed small villages.

On February 8, 1887, Congress passed the General Allotment Act, ch. 119, 24 Stat. 388 (1887). Cf. 25 U.S.C. § 331, note on Prior Law. One of the purposes of this Act was to provide Indians with the economic ability to integrate into society. This Act provided for the allotment of land in severalty to Indians on various reservations, including the Quinault Reservation. The Act authorized the President of the United States to grant such allotments whenever, in his opinion, reservation land was found to be suitable for agricultural or grazing purposes. The Secretary of the Interior was directed to issue patents declaring that the United States held the allotted lands in trust for 25 years for the sole use and benefit of the individual Indian allottees. At the end of this 25-year trust period, the United States was to convey the land to the Indian allottee or his heirs “in fee, discharged of said trust and free of all charge or incumbrance whatsoever.” Ch. 119, § 5, 24 Stat. 389 (1887), 25 U.S.C. § 348. It is upon this statutory language that plaintiffs base their claim. It is their assertion that such language precludes any charges being levied against the trust, even while it is still in existence. Congress enacted legislation in 1906 and again in 1934 extending such trust period indefinitely.

The allotments made under the General Allotment Act were not to exceed 80 acres of agricultural land or 160 acres of grazing land. No reference was made in the Act to forest or timberland. The allotment process began in 1905 and continued without difficulty until 1911. By that time, over 750 allotments had been made, more than half of which were granted to Indians who were not members of the Quinault or Quileute tribes. For this reason, in 1911, Congress enacted legislation making clear the President’s right to grant allotments to Indians not of the Quinault or Quileute tribes. This legislation directed the Secretary of the Interior to grant allotments on the Quinault Reservation—

* * * to all members of the Hoh, Quileute, Ozette or other tribes of Indians in Washington who are affiliated with the Quinaielt and Quileute tribes in the treaty of July first, eighteen hundred and fifty-five, and January twenty-third, eighteen hundred and fifty-six, and who may elect to take allotments on the Quinaielt Reservation rather than on the reservations set aside for these tribes: Provided, That the allotments authorized herein shall be made from the surplus lands on the Quinaielt Reservation after the allotments to the Indians thereon have been completed. [Ch. 246, 36 Stat. 1346 (1911).]

The allotment process came to a temporary halt in 1912 when the Secretary of the Interior determined that the reservation land was more valuable for its timber than for agricultural or grazing purposes. The allotment process did not resume until 1924, after the Supreme Court in United States v. Payne, 264 U.S. 446, 44 S.Ct. 352, 68 L.Ed. 782 (1924), settled the question of whether the Allotment Act, in referring only to grazing and agricultural land, meant to preclude allotment of timberland. The Court ruled that it did not.

The papers before the court indicate that some 2,340 trust allotments on the Quinault Reservation were issued to individual Indians. Some of the alloted land is not now in Indian ownership but the lands of about 2,000 Indians are still in trust status. Plaintiffs are from among this group. This then is the historical and factual context within which Congress enacted the legislation which bears directly on the question presented in this case.

In 1910, Congress authorized the commercial sale of standing timber on allotted Indian lands:

* * * the timber on any Indian allotment held under a trust or other patent containing restrictions on alienations, may be sold by the allottee with the consent of the Secretary of the Interior and the proceeds thereof shall be paid to the allottee or disposed of for his benefit under regulations to be prescribed by the Secretary of the Interior. [Ch. 431, § 8, 36 Stat. 857 (1910).]

Before the passage of this statute, no authority existed permitting the Quinault allottees to sell their timber.

Logging operations began on the Quinault Reservation in 1922. Prior to that date, in 1920, Congress enacted legislation authorizing the Secretary of the Interior to charge “reasonable fees” for services rendered to Indian tribes or individual Indians:

* * * the Secretary of the Interior * * * js x- * authorized and directed, under such regulations as he may prescribe, to charge a reasonable fee for the work incident to the sale, leasing, or assigning of such lands, or in the sale of the timber, or in the administration of Indian forests, to be paid by vendees, lessees, or assignees, or from the proceeds of sales, the amounts collected to be covered into the Treasury as miscellaneous receipts. [Ch. 75, § 1, 41 Stat. 415 (1920).]

From 1920 until the present, the United States has had the authority to levy administrative charges against the proceeds of timber sales on the Quinault Reservation. The General Timber Sale Regulations of April 10, 1920, issued by the Forestry Branch of the Indian Service, Department of the Interior, provided, inter alia:

* * * for the setting aside of not more than 10% of the proceeds of [the timber] sale[s] to cover the expense of advertising, marking, scaling, protection of timber, and supervision of the sale. * * *. [United States v. Eastman, 118 F.2d 421, 423 (9th Cir. 1941), rev’g on other grounds,

28 F.Supp. 807 (W.D.Wash.1939).]

These statutes, and the regulations issued thereunder, remained substantially unchanged until 1964 when Congress revised the 1910 Act. The amended provision incorporated a reference to the 1920 Act (25 U.S.C. § 413) and provided that—

The timber on .any Indian land held under a trust or other patent containing restrictions on alienations may be sold by the owner or owners with the consent of the Secretary of the Interi- or, and the proceeds from such sales, after deductions for administrative expenses to the extent permissible under section 413 of this title, shall be paid to the owner or owners or disposed of for their benefit under regulations to be prescribed by the Secretary of the Interior. * * *. [New language italicized. Sec. 8(a), 78 Stat. 187 (1964); 25 U.S.C. § 406(a).]

and that—

* * * It is the intention of Congress that a deduction for administra-. tive expenses may be made in any case unless the deduction would violate a treaty obligation or amount to a taking of private property for public use without just compensation in violation of the fifth amendment to the Constitution. * * *. [Emphasis supplied. Sec. 8(a), 78 Stat. 187 (1964); 25 U.S.C. § 406(a).]

Plaintiffs claim that the Government has breached its promises to them made in the General Allotment Act, by which it promised no charge or encumbrance on their future fee, by many years later creating an administrative charge for handling some aspects of the Indian trust. It is obvious that when Congress wrote the language of the General Allotment Act, it did not have in mind at all the possibility of the administrative charge which came 33 years later. In 1887 Congress was speaking only in conventional terms of an encumbrance on the fee, such as would be represented by a lien or a mortgage. The Government has never violated that commitment. In 1887, when the General Allotment Act became law, there was no statutory authority for sale of the timber. This arose much later in 1910, and was followed by other statutory authority for the administrative charges in 1920. When the 1887 Act was passed, the United States had not at that point undertaken the obligation of timber management and sale for the benefit of the Indians, so it cannot be said that at that point they were entering into a contract to manage a property free of charge, as plaintiffs claim. If the United States assumed any such special duty to the Indians in this connection it would be in the Treaty of 1855 but plaintiffs admit that it is not there. No subsequent act of Congress changed the treaty, broke any contract, or took any private property of plaintiffs.

Plaintiffs misinterpret the language of the General Allotment Act. That Act only provides that, when the trust in favor of the Indian allottees is terminated and the land is transferred to such allottees in fee, such property will be transferred to the allottees free of any debts, liens or similar encumbrances. The purpose of the General Allotment Act of 1887, as already stated, was to lay a foundation for integrating Indians into the mainstream of American society. As such, the Act sought to establish Indians financially so that the reservations could be dissolved and the Indians living thereon could be integrated into modern society. The Allotment Act was a means of staking such Indians so that they would have the wherewithal to survive economically once the umbilical cords tying them to reservations were severed. It was entirely consistent with this purpose that Congress sought to insure that the Indians would eventually receive their fee to allotted lands with no strings attached.

Nothing in the 1887 Act, however, prohibits reasonable administrative charges against the proceeds from such allotted lands while held in trust and administered by the United States. This is consistent with the law of trusts which does not require that a trustee gratuitously contribute his services, absent an express agreement to the contrary.

A trustee can properly incur expenses which are necessary or appropriate for the carrying out of the purposes of the trust. (Footnote omitted.) When such expenses are properly incurred, they should ultimately be borne by the trust estate rather than by the trustee personally. [III Scott, Trusts § 244 (3d ed. 1967); see generally Trustees v. Greenough, 105 U.S. 527, 532, 26 L.Ed. 1157 (1881).]

There is no indication in the legislative history to the 1964 statutory amendments that Congress was much concerned about its authority to levy such administrative charges against the timber proceeds under 25 U.S.C. § 413. The legislative history shows that the major purpose of the 1964 amendment to 25 U.S.C. § 406(a) was to provide the statutory basis for modernizing timbering operations on Indian reservations. Under the 1910 Act, the Interior Department was not authorized to meet the 1964 “standards of timber harvesting in accordance with principles of sustained yield, or to permit the removal of immature trees of poor quality or undesirable species.” H.R.Rep.No.1292, 88th Cong., 2d Sess. (1963), 1 U.S.Cong. & Admin.News p. 2162 (1964); S.Rep.No. 672, 88th Cong.2d Sess. (Nov. 27, 1963). Ancillary to this major purpose was the incorporation by reference of the provisions of the 1920 Act concerning administrative charges (now 25 U.S.C. § 413) into the amended 1910 Act. This change was described by Assistant Secretary of the Interior, John A. Carver, Jr., as a “technical amendment” not changing the present law. 1 U.S.Cong. & Admin.News p. 2164 (1964). Plaintiffs’ attempt to attribute to Congress a Machiavellian motive to circumvent the no “charge or incumbrance” language of the General Allotment Act by the 1964 amendment to section 406(a) lacks a substantial basis in fact.

Additionally, the late John W. Cragun, before his decease a member of the distinguished law firm representing plaintiffs in this action, testified before Congress that the incorporation of language authorizing an administrative charge of 10 percent against the timber proceeds would be in violation of the trust established by the 1887 Allotment Act. Congress, however, rejected the arguments propounded by Mr. Cragun and amended section 406(a), as heretofore shown. Since Congress, before it enacted the 1964 amendments, had opportunity to consider the same arguments as are now being made to this court, it would seem presumptuous for us to make an interpretation of the legislative history at variance with what Congress so plainly did. As plaintiffs suggest, Congress anticipated this suit, after the Cragun testimony, when it wrote into the law that the charges should not “violate a treaty obligation or amount to a taking of private property for public use, without just compensation.” Sec. 8(a), 78 Stat. 187 (1964); 25 U.S.C. § 406(a). This language made no substantive change in the prior law as to administrative charges. Those charges are now alleged to be in conflict with the General Allotment Act of 1887. But, the subsequent enactments which authorized and reaffirmed them through 1964 were specific and dispose of any arguments about congressional intent or authority in the matter arising from the 1887 Act. The 1964 Act raised two caveats about the charges, in apparent deference to Mr. Cragun. First, it cautioned that the charges should not violate any treaty. United States v. Eastman, supra, has settled that by saying that the charges do not violate the 1855 Treaty. Second, it was said that there must be no taking of private property for public use, as prohibited by the Fifth Amendment. The questioned charges are not a taking of plaintiffs’ property for public use. Congress permitted reasonable charges, as first outlined in the 1920 Act, for the advertising, marking, scaling, protection of timber, and supervision of the sale thereof, which were all designed for plaintiffs’ use and benefit. There is no showing in this case of a breach of fiduciary duty whereby the United States as trustee made more than a reasonable charge for the services from which plaintiffs have so greatly benefited.

We hold that the two sins flagged by the 1964 amendments have not been committed. Indians not fully emancipated from the control and protection of the United States are subject to its legislation. Long ago the Supreme Court affirmed this authority of Congress to exercise the plenary power of the United States over Indians. It said that such a power “has always been deemed a political one, not subject to be controlled by the judicial department of the government.” Lone Wolf v. Hitchcock, 187 U.S. 553, 565, 23 S.Ct. 216, 221, 47 L.Ed. 299 (1903).

It follows, therefore, that Congress had the power to authorize the charges now in issue just as it had the power, earlier, to provide in the General Allotment Act that when the fee to the allotted land is passed to the allottees it should be without a cloud on it. The Indians say that they have received patent deeds, free and clear, signed by the President. But, the deeds recite the language of the General Allotment Act that the land is held in trust and that when the trust terminates the fee will then pass without charge or encumbrance against it. It is from the operation of the trust that the charges here have arisen. The charges do not run against the titles or cloud them in any way as an unpaid tax would. The charges are deducted when the timber is sold and do not encumber the fee or constitute a possible lien on it.

In United States v. Eastman, 118 F.2d 421 (9th Cir. 1941), rev’g on other grounds, 28 F.Supp. 807 (W.D.Wash. 1939), six individual Quinault allottees brought suit to contest the validity and application of some of the very authority involved in the present case. They said that the deduction of the administrative charges violated the 1855 Treaty. The Ninth Circuit rejected that contention and ruled that the treaty did not immunize the timber proceeds from charges authorized by the 1920 statute and regulations promulgated thereunder. The court said that it found “nothing in the [1855] treaty which could be thought to limit the power of Congress” to make such assessments. United States v. Eastman, 118 F.2d at 425. The court noted that the trust patents of plaintiffs were issued in conformity with the General Allotment Act of February 8, 1887, and contained the usual references thereto. However, the impact, if any, of the General Allotment Act on the administrative charges was not presented to the court. For the reasons shown herein, we do not think it makes any difference, or would have made any difference, in Eastman. Plaintiffs concede that nothing in that Act or in the treaty prohibits the charges. They place their sole reliance upon certain court decisions which they say compel a result in their favor and urge that we disagree with the decision in Eastman, a challenge which we respectfully decline.

Plaintiffs’ argument that there is no tenable difference between Choate v. Trapp, 224 U.S. 665, 32 S.Ct; 565, 56 L.Ed. 941 (1912), and this case, is also misplaced. -In that case the Choctaw and Chickasaw tribes, in Oklahoma, negotiated agreements with the United States to give up their communal lands in consideration of land patents to be allotted to the 8,000 individual tribal members who would thereupon surrender any rights they had to the property formerly held in common. These agreements were incorporated into the Curtis Act of 1898, ch. 517, 30 Stat. 507, which specified that the land allotment was to be nontaxable while owned by the original allottee, but not to exceed 21 years from the date of the patent. Also, one-half of each allotment was inalienable for 21 years. This vested right of nontaxability was written into the Constitution of the State of Oklahoma. Congress, thereafter, in 1908, passed a general act removing restrictions and tax exemptions from land held by Indians of the class to which these Indians belonged. Oklahoma, thereupon, attempted to tax the allotments. The Supreme Court held that removal of restrictions on alienation of Indian allotments falls within the power of Congress to regulate Indian affairs, citing Lone Wolf v. Hitchcock, supra, but that the specific provision for nontaxation was a vested property right protected by the Fifth Amendment, was binding on both the Nation and the State, and was not subject to impairment or abrogation by either. In contrast, while tax exemption was promised in Choate, arising from valid agreement, no equivalent agreement of freedom from administrative charges was made in the instant case. United States v. Eastman, supra.

Plaintiffs also place great reliance upon Squire v. Capoeman, 351 U.S. 1, 76 S.Ct. 611, 100 L.Ed. 883 (1956). That case was brought by a Quinault allottee to recover capital gains taxes paid on the proceeds of timber sold from his allotment. Capoeman made the same argument that he and other plaintiffs now make here. He said that the taxes collected were in violation of the provisions of the Treaty of 1855, the trust patent, and the General Allotment Act. The Supreme Court held that collection of the tax was indeed inconsistent with the Government’s promise in the General Allotment Act to transfer the fee “free of all charge or incumbrance whatsoever.” The Court said that although this statutory provision is not expressly couched in terms of nontaxability, since doubtful expressions are to be resolved always in favor of the Indians who are wards of the Nation, the general words “charge or incumbrance” might well be sufficient to include taxation. But, the Court did not base its holding on that supposition. It has said repeatedly that in ordinary affairs of life not governed by treaties or remedial legislation “[ejxemptions from taxation do not rest upon implication (footnote omitted).” United States Trust Co. v. Helvering, 307 U.S. 57, 60, 59 S.Ct. 692, 693, 83 L.Ed. 1104 (1939); see Oklahoma Tax Comm’n v. United States, 319 U.S. 598, 63 S.Ct. 1284, 87 L.Ed. 1612 (1943). This doctrine was recently cited with approval in United States v. Mason, 412 U.S. 391, 93 S.Ct. 2202, 37 L.Ed.2d 22 (1973). The Capoeman Court pointed out that section 6 of the Act had been amended to include a proviso giving the Secretary of the Interior authority to determine an Indian allottee to be competent and, in such event, to issue to him a patent in fee simple “ * * * and thereafter all restrictions as to sale, incumbrance, or taxation of said land shall be removed and said land shall not be liable to the satisfaction of any debt contracted prior to the issuing of such patent * * * (emphasis supplied).” 351 U.S. at 7, 76 S.Ct. at 615. From this language the Court reasoned that Congress implicitly meant there should be no taxation of an incompetent Indian who had not received his patent in fee simple.

The justice and logic of that holding is plainly sound. “ ‘[I]t is not lightly to be assumed that Congress intended to tax the ward for the benefit of the guardian.’ ” Squire v. Capoeman, 351 U.S. at 8, 76 S.Ct. at 616. The trustee’s duty is to preserve the trust and income therefrom to further the goal of qualifying the Indian to take his place in modern society. The Court said: “This chance is guaranteed by the tax exemption afforded by the General Allotment Act, and the solemn undertaking in the patent.” 351 U.S. at 10, 76 S.Ct. at 617.

The question now is whether the administrative charges can fairly be equated to taxes under the foregoing rationale. We think not. No language in the 1855 Treaty, the Allotment Act, or any subsequent trust agreement dealt with such a charge in the same clear manner as the proviso to section 6 of said Act (now 25 U.S.C. § 349) treats imposition of taxes. While a capital gains tax is paid on, and for, realized accessions to wealth, the administrative charges in the present case have been authorized in return for many services (see the 1920 Act, supra) rendered in plaintiffs’ favor by the Government to preserve and increase plaintiffs’ wealth. If it did not make sense to tax the ward for the benefit of the guardian, by the same token it makes little sense to charge the trustee for services to the ward which would violate the trust if not performed.

Plaintiffs’ contention that Eastman must be reconsidered in light of Capoeman must fail. In Capoeman, the Supreme Court cited Eastman for the proposition that “[t]he Government determines the conditions under which the cutting is made.” 351 U.S. at 10, 76 S.Ct. at 617. It was plainly aware of the holding in that case and cast no shadows over its viability, although, of course, administrative charges for timber handling were not directly involved in Capoeman. In the present case, the United States, in valid exercise of its plenary power, enacted legislation providing for the assessment of reasonable administrative charges against the Quinault allot-tees for services rendered to them in the preservation and sale of their timber. This practice has a standing now of 53 years with the Quinaults and has received continuous congressional approval. There is no ambiguity here to be resolved by the rule of giving the Indian benefit of all doubt.

The practice of deducting reasonable charges to help cover the costs of selling tribal lands, buildings, collection of rents and royalties, administering Indian moneys, appraising timber, and certain other activities for benefit of Indians, has long been recognized as appropriate by this court in certain circumstances. In the court’s extensive analysis of such matters in Choctaw Nation v. United States, 91 Ct.Cl. 320 (1940), cert. denied, 312 U.S. 695, 61 S.Ct. 730, 85 L.Ed. 1130 (1941), the court reaffirmed that “the rule as to construction of treaties with the Indians most favorable to the Indians does not extend to the point of permitting the court to indulge in presumptions and implications of assumed obligations by the government where the attendant facts and circumstances clearly negative any intention upon the part of the government to assume such obligations.” 91 Ct.Cl. at 370. While that ease involved a tribe, and the instant case involves claims by individual Indian allottees, there is no apparent reason to distinguish the propriety of such practices as here questioned, since we conclude that the General Allotment Act on which plaintiffs base their claims gives them no rights that the tribes do not have as to these particular administrative charges. To hold otherwise would also unjustly enrich plaintiffs at the expense of the Government which is not claimed in this case to have derived benefit or profit from these sales of timber. Plaintiffs, as previously noted, concede that neither the Quinault Treaty nor the General Allotment Act prohibits these charges. Fundamentally, their contention is that, since the Supreme Court has held in cases involving taxes that the amended General Allotment Act specifically prohibits taxation of Indian gain from timber sales, a charge for administering an Indian trust allotment, although specifically authorized by statute since 1920, must, by implication, also be prohibited. We believe that result does not follow in this case, for the reasons given. We do not, of course, pass on the propriety of other charges or of any taxes imposed with respect to this property.

In conclusion, the court finds that the United States had proper authority, under 25 U.S.C. § 406(a) and § 413, to assess reasonable administrative charges against the proceeds of timber sales on the Quinault Reservation from allotments owned by individual Indians, and administered in trust by the United States. The plaintiffs have shown no taking of their property for public purposes, no breach of contract, or no violation of fiduciary duty, treaty, statute or regulation. It follows that plaintiffs, therefore, have failed to state a claim for which relief may be granted.

The defendant’s motion for summary judgment is granted. Plaintiffs’ cross-motion for partial summary judgment is denied. The petition is dismissed.

      . In its prior consideration of this case, Quinault Allottee Ass’n v. United States, 453 F.2d 1272, 197 Ct.Cl. 134 (1972), this court found that all the elements necessary to prosecute a federal “class action” were present. 453 F.2d at 1276, 197 Ct.Cl. at 140-141; F.R.Civ.P. Rule 23. The court agreed to notify other potential plaintiffs of the pendency of this action and to permit them to become members of the class prosecuting the action if they so desired. Unlike the situation in an F.R.Civ.P. 23 class action, however, the court determined that it was not necessary or appropriate to bind allottees who failed to join this suit. Since the January 21, 1972 decision, many hundreds of individuals have elected to join this action.

      . The reasonableness of the charges is not in issue in this claim, only the right to make any charge at all. Plaintiffs have other actions pending — Ct.Cl. Nos. 772-71, 773-71, 774-71, and 775-71 — raising the reasonableness and other issues.

      . Plaintiffs’ claims, resulting from administrative charges assessed before March 15, 1965 (6 years before the filing of a petition in this case), would be barred by the statute of limitations, 28 U.S.C. § 2501, as to Indians who had access to this court. Capoeman v. United States, 440 F.2d 1002, 194 Ct.Cl. 664 (1971). Plaintiffs ask us to overrule that decision which was decided by a unanimous court. The decision in the present case makes it unnecessary to consider whether the alleged “noncompetence” of any of the plaintiff-allottees has worked to toll the statute of limitations. It will also be unnecessary to consider possible waiver by reason of powers of attorney given by plaintiffs to the forest manager authorizing the harvesting of their timber and assessment of the now contested administrative charges. The issue of interest is rendered moot by our holding as to the pending claims.

      . These tribes were the Quinault, the Quileute, the Chekalis, the Chinook, the Cowlitz, the Hoh, and the Quit.

      . Cf. Halbert v. United States, 283 U.S. 753, 757, 51 S.Ct. 615, 75 L.Ed. 1389 (1931), rev’g, United States v. Halbert, 38 F.2d 795 (9th Cir. 1930), and aff’g District Court case (unreported),

      . Ch. 3504, 34 Stat. 326 (1906):
      “That prior to the expiration of the trust period of any Indian allottee to whom a trust or other patent containing restrictions upon alienation has been or shall be issued under any law or treaty the President may in his discretion continue such restrictions on alienation for such period as he may deem best: Provided, however, That this shall not apply to lands in the Indian Territory.”

      . Indian Reorganization Act of 1934, ch. 576, § 2, 48 Stat. 984 (1934) [25 U.S.C. § 462] : “The existing periods of trust placed upon any Indian lands and any restriction on alienation thereof are hereby extended and continued until otherwise directed by Congress.”

      . In Mitchell v. United States, 22 F.2d 771 (9th Cir. 1927), an Indian affairs agent, charged with dispersing allotments on the Quinault Reservation, testified that allotments had been discontinued in 1912 because the lands were more valuable for timber than for agricultural purposes.

      . Eastman v. United States, 28 F.Supp. 807 (W.D.Wash.1939), rev’d on other grounds, 118 F.2d 421 (9th Cir. 1941).

      . The General Forest Regulations of April 23, 1936, called for an 8-percent deduction from the “gross amount received for the timber sold under regular supervision from allotted or from unallotted land.” This amount was to cover the cost of “examining, supervising, advertising, collecting, disbursing, accounting, marketing, scaling, caring for the slash, and protecting from fire the timber and young growth left standing on the land being logged or upon adjacent land.” 25 C.F.R. § 61.25 (1939). When there was no administration by the Indian Service subsequent to a sale, a deduction of 3 percent of the sale price was to be taken “to cover the cost of estimating the timber and effecting the sale.” 25 C.F.R. § 61.25 (1939). The amount of the deductions for administration was changed to 10 percent and 5 percent, respectively, in 1944, and has remained at that level to the present. 25 C.F.R. § 61.25 (1944); 25 C.F.R. § 141.18 (1973).

      . 25 U.S.C. § 413; ch. 75, § 1, 41 Stat. 415 (1920), amended, ch. 158, 47 Stat. 1417 (1933):
      “The Secretary of the Interior is authorized, in his discretion, and under such rules and regulations as he may prescribe, to collect reasonable fees to cover the cost of any and all work performed for Indian tribes or for individual Indians, to be paid by vendees, lessees, or assignees, or deducted from the proceeds of sale, leases, or other sources of revenue: * *

      . In another case involving a Quinault Indian allottee, the Supreme Court said in a footnote: “The term ‘patent’ inadequately describes respondent’s interest. ‘Congress * * * was careful to avoid investing the allottee with the title in the first instance, and directed that there should be issued to him what * * * is in reality an allotment certificate * * *.’ Monson v. Simonson, 231 U.S. 341, 345, 34 S.Ct. 71, 72, 58 L.Ed. 260” [Squire v. Capoeman, 351 U.S. 1, 4, 76 S.Ct. 611, 613, 100 L.Ed. 883 (1956).]

      . In Capoeman v. United States, 440 F.2d 1002, 194 Ct.Cl. 664 (1971), plaintiff’s chailenge to collection of the administrative charges was rejected by the court on the grounds of the statute of limitations, as to which plaintiff was not “noncompetent.”

      . “The rule that words in treaties with, and statutes affecting, Indians, must be interpreted as the Indians understood them is not applicable where the statute is not in the nature of a contract and does not require the consent of the Indians to make it effectual.” United States v. First Nat’l Bank, 234 U.S. 245, 34 S.Ct. 846, 58 L.Ed. 1298 (1914), and quoted with approval in Capoeman v. United States, 440 F.2d at 1008, 194 Ct.Cl. at 677.


author: PER CURIAM.

text:
    D. C. ANDREWS INTERNATIONAL, INC., Appellant, v. The UNITED STATES, Appellee.
    Customs Appeal No. 5520.
    United States Court of Customs and Patent Appeals.
    Oct. 25, 1973.
    Allerton deC. Tompkins, New York City, attorney of record, for appellant.
    Irving Jaffe, Acting Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, New York City, David B. Greenfield, Civil Division, Department of Justice, for the United States.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
   PER CURIAM.

This appeal is from the order and judgment of the United States Customs Court, D. C. Andrews International, Inc. v. United States, Reappraisement Nos. R67/18607, etc., entered July 21, 1972, denying appellant’s motion for vacation of an order entered May 26, 1972, dismissing the instant five actions for lack of prosecution, for a rehearing as to the dismissal, and for permission to file a Motion to Consolidate the appeals in the instant actions with a different reappraisement appeal.

We have considered the order and the effect of the order upon appellant, and agree with the Customs Court that the dismissal of the actions for lack of prosecution was properly granted.

The order of the Customs Court is affirmed.


author: PER CURIAM. BALDWIN, Judge

text:
    60 CCPA
    MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and Matsushita Electric Company of America, Appellants, v. The UNITED STATES TREASURY DEPARTMENT et al., Appellees.
    Customs Appeal No. 5496.
    United States Court of Customs and Patent Appeals.
    Feb. 1, 1973.
    Ira M. Millstein, A. Paul Victor, Marshall C. Berger, New York City, (Weil, Gotshal & Manges, New York City), attorneys of record, for appellants.
    E. Grey Lewis, Acting Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Frederick L. Ikenson, New York City, for the United States.
    Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges.
   PER CURIAM.

This appeal is from the order and accompanying memorandum of the United States Customs Court, Matsushita Electriet Industrial Co., Ltd. v. The United States Treasury Department, 67 Cust.Ct. 328, C.D. 4292 (1971), granting appellees’ motion to quash and dismiss a summons and civil action on the ground that the jurisdiction of the Customs Court had not been properly invoked. The civil action was commenced by a “Petition for Mandatory, Injunctive and Other Relief,” filed in the Customs Court requesting an order of that court vacating all determinations and findings in the anti-dumping proceeding entitled Television Receiving Sets, Monochrome and Color, From Japan (ATS 643.3; AA1921-66), dismissing the proceeding, enjoining appellees from taking any further action in connection therewith, and declaring the invalidity and unconstitutional nature of the proceeding, vacating the dumping determination, and requiring appellees to conduct the proceeding in a manner requested. The proceedings conducted by the Bureau of Customs and the Tariff Commission culminated in a finding by the Secretary of the Treasury that the television sets are being, or are likely to be, sold at less than fair value within the meaning of section 201(a) of the Anti-Dumping Act of 1921, as amended, thus making the sets subject to dumping duties. However, no such dumping duties have been levied, and accordingly no protest has been filed or denied. The claim for jurisdiction of the Customs Court was made under the All Writs Act, 28 U.S.C. § 1651.

We have considered the order and accompanying memorandum of the Customs Court and find ourselves in agreement therewith.

The order of the Customs Court is affirmed.

Affirmed.

BALDWIN, Judge

(concurring).

The relief sought by appellants is summarized in their brief as follows:

[Appellants’] petition sought: (a) an order vacating all determinations and findings in the aforementioned anti-dumping proceeding, dismissing the proceeding and enjoining defendants from taking any further action in connection therewith, and declaring the invalidity and unconstitutional nature of the proceeding; or (b) an order declaring the invalidity and unconstitutional nature of the proceeding and vacating the dumping determination, and requiring appellees to conduct the proceeding in the manner required by law and the Constitution * * *.

Appellants are in effect asking the Customs Court to exercise jurisdiction in the nature of mandamus, similar to the jurisdiction granted the United States District Courts by the Mandamus Act of 1962, 28 U.S.C. § 1361. A proposal was made during the pendency of the Customs Court Act of 1970 that such jurisdiction should be conferred on the Customs Court, but the proposed provision was never enacted. See Hearings on S. 2624 before Subcom. No. 3 of the House Comm. on the Judiciary, 91st Cong., 2d Sess., ser. 13, at 254-55 (1970); Hearings on S.2624 before the Subcomm. on Improvements in Judicial Machinery of the Senate Comm. on the Judiciary, 91st Cong., 1st Sess., at 205 (1969).

The Customs Court was clearly correct in holding that the relief sought here is not within the powers granted it under the All Writs Act. I agree with the majority opinion and join in its endorsement of the Customs Court’s well-reasoned memorandum.


author: ALMOND, Senior Judge.

text:
    Application of Charles AYME De La CHEVRELIERE.
    Patent Appeal No. 9093.
    United States Court of Customs and Patent Appeals.
    Oct. 25, 1973.

      Arthur O. Klein, New York City, attorney of record, for appellant, Alfred W. Vibber, New York City, of counsel.
    Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents. Jere W. Sears, Washington, D.C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Associate Judges, and ALMOND, Senior Judge.
   ALMOND, Senior Judge.

This is an appeal from the decision of the Patent Office Board of Appeals affirming the examiner’s rejection of claims 4 and 5 of appellant’s application, entitled “Automatic Soil Sprinkling Arrangement” on the ground that they were obvious within the meaning of 35 U.S.C. § 103. We reverse.

The Invention

Appellant’s invention relates to an automated system for soil irrigation. According to the specification, soil will dry out to a depth at which permanently moist conditions are encountered. Once the soil dries out, the dry layer acts as a barrier to moisture rising by capillary action from the permanently moist zone into the zone of dryness. Therefore, if the soil is irrigated without completely wetting the dry zone, it dries out at a faster rate and must be more frequently irrigated than would be the case had the soil been wet down to the permanently moist zone.

The general nature of appellant’s invention can be seen from the following excerpt taken from the specification:

My invention has therefore for its object an arrangement controlling the sprinkling operation and comprising two electrodes measuring the electric resistivity and consequently the moisture of the ground, the novelty of the invention consisting in that the two electrodes are laid at different depths and are preferably spaced in a transverse direction, the upper electrode extending in the layer of soil adapted to be moistened by surface sprinkling while the lower electrode lies at a greater depth within the layer of soil carrying a residual moisture in a manner such that the operation of the sprinkler is controlled and continued until the layer of the soil moistened by the sprinkling sinks down to the layer carrying a residual moisture and enclosing the deeper electrode, which allows restoring continuity of the hygrometric condition of the soil.

The rejected claims, which are directed to systems for achieving the aforementioned object, read as follows:

4. A soil moistening system, comprising in combination a first isolated electrode, in an upper layer of the soil which is adapted to be moistened, a second isolated electrode in a lower layer of the soil which incorporates a permanent residual moisture, means for measuring the electrical resistivity of the soil between said electrodes and thereby the moisture content of the soil when said electrodes are connected to a source of electric power, said means being operatively connected to the actuating means of a sprinkler system and being adapted to activate said sprinkler system until the moisture in said upper layer has sunk sufficiently for it to reach the upper surface of the lower soil layer which incorporates permanent residual moisture, said first and second electrodes being substantially spaced from each other in a horizontal direction.

5. A soil moisture detecting system, comprising in combination, a first isolated electrode in an upper layer of the soil which is adapted to be moistened, a second isolated electrode in a lower layer of the soil which incorporates a permanent residual moisture, a source of electric power adapted to be connected to said electrodes thereby causing an electric current to flow therethrough and through the soil disposed therebetween, means for measuring the electrical resistivity of the soil between said electrodes thereby measuring the moisture content of the soil, said first and second electrodes being substantially spaced from each other in a horizontal direction.

A system upon which these claims read can be better understood by reference to Figs. 1 and 2 of appellant’s application :

Fig. 1 represents an automated irrigation system acknowledged by appellant to be old in the art. In it, electrodes 1 and 2 are buried in the soil at a predetermined depth. When the layer of soil B is dry, no current or very weak current passes between the electrodes. This condition is sensed by means 3 which transmits a signal through leads 4 and 5 to a sprinkler not shown. When the sprinkling wets the soil down to the electrodes, a current will pass between the electrodes. This is sensed by means 3 which transmits a signal shutting off the sprinkler. This leaves a dry zone C between zone B and the permanently moist zone A.

Fig. 2 differs from Fig. 1 in two important particulars. First, it will be noted that electrodes 6 and 7 are vertically rather than horizontally displaced from each other. Secondly, electrode 7 is buried in the zone of permanent moisture. Therefore, when the soil dries out, irrigation will be initiated as described for Fig. 1. However, it will continue until the dry soil is wet down to zone A.

The arrangement in Fig. 2 has one shortcoming. In an actual use situation, the soil is not homogeneous. Thus, if one electrode is placed directly over the other, as shown in Fig. 2, the cross-section of the soil between the electrodes may not be representative of the major portion of the soil to be irrigated. To avoid this, appellant’s specification indicates that the electrodes 6 and 7 should be further displaced from each other in a horizontal direction as well as vertically. Claims 4 and 5 read upon such an arrangement.

Rejection

The examiner’s rejection of the claims under § 103 was based upon the following references:

Mercer 3,195,816 July 20, 1965

Ames (French) 1,177,789 December 8, 1958

Mercer describes an automated soil sprinkling system corresponding to that shown in Fig. 1 of appellant’s application and acknowledged by appellant to be prior art. Ames describes a rod structure designed to be inserted into the soil. The rod has a number of electrodes disposed along its length which indicate the moisture content of the soil at different levels. Fig. 1 of that patent shows such a structure and is reproduced below:

Elements 12 are moisture-sensing cells comprising a pair of electrodes spaced apart from each other within the cell. Each cell and its pair of electrodes are insulated from the others disposed along the rod. The electrodes within the cell are surrounded by a hygroscopic material whose electrical conductivity or resistivity varies according to its moisture content. Its moisture content is determined by that of the surrounding soil. The electrodes are connected to a battery powered ohmmeter, designated 60. The output of the battery is connected across the electrodes of the cell. The amount of current that flows between the electrodes is dependent upon the conductivity or resistivity of the hygroscopic material, usually gypsum. The conductivity or resistivity is itself dependent upon the moisture content of the material. By sequentially reading the conductivity or resistivity of the cells, a profile of soil moisture can be obtained.

In his Answer, the examiner justified his rejection in the following way:

The issue in this appeal is simply whether or not it would be obvious to vary the depth of the electrodes 14 and 15 of Mercer in view of the teaching of Ames which discloses electrodes at varying depths. The secondary reference merely shows electrodes at different depths and even without such showing it would be obvious to the Examiner to place either one or both of the electrodes 14 and 15 at any depth so as to provide for more ground moisture. With the Mercer reference clearly showing all of the elements which produce the same results as Appellant’s device the mere relocation of the electrodes cannot be a patentable invention.
The statements by appellant that Mercer cannot obtain the results of appellant’s device are mere statements without fact and are not supported by any proof. Furthermore, a person installing the electrodes of Mercer could conceivably, and most probably would, have one electrode somewhat lower than the other and would meet the broad terms of the claims.

In affirming the rejection, the board made the following observations:

The appellant notes that the appealed claims define that one electrode is disposed in an upper layer of the soil which is adapted to be moistened and the second electrode is disposed in a lower layer of the soil which incorporates a permanent residual moisture. The appellant also notes that the first and second electrodes are further defined as being substantially spaced from each other in a horizontal direction. In the appellant’s opinion, Ames, like Mercer, can measure the electrical resistance of only a single thickness or layer of the soil and thus neither of the patents, nor their proposed combination, discloses a system such as that defined in the appealed claims.
Mercer clearly discloses two electrodes which are horizontally spaced in the soil to give a determination of the moisture between the electrodes and the use of this determination to control a sprinkler system. Ames clearly discloses moisture measuring elements 12 which include vertically spaced electrodes 19 and 20. In our opinion, it would be obvious to one skilled in the art to space the electrodes of Mercer in a vertical direction in view of the teaching of Ames who measures the moisture between vertically spaced electrodes.

Opinion

We have set forth at length portions of the examiner’s and board’s reasoning concerning the propriety of the rejection made under § 103. In our view, neither sets forth a sufficient legal basis for the rejection made.

The gists of both their positions are essentially the same, i. e., in view of Ames it would be obvious to locate one electrode shown by Mercer at a depth lower than the other. The examiner went so far as to say that a mere relocation of one of these electrodes could not be patentable.

The error committed by both the examiner and the board is that they ignored a critical limitation in the claims. As appellant has continuously urged, his claims require more than a simple relocation of one of the electrodes shown by Mercer. Instead, one electrode must be placed in a permanently moist zone while the other must be located in a zone susceptible to drying out.

Therefore, even though we were to agree that it would be obvious to vertically displace one of the electrodes shown by Mercer, it does not follow that it would have been obvious to arrange the electrodes in the manner required by the claims. We think this conclusion is supported by the record. In the first place, neither Ames nor Mercer discusses the existence of a permanently moist zone. Furthermore, Mercer indicates that the electrodes can be located in the soil at any level from the surface down to root depth. Apparently, the latter extreme would insure that the roots receive adequate moisture. However, appellant’s specification states that the permanently moist zone lies below root depth. Neither the examiner nor the board has challenged the accuracy of this statement.

In view of this teaching by Mercer, we must assume that one skilled in the art would not be led to arrange the electrodes in a manner contrary to that disclosed by the reference, i. e. so that at least one electrode is below root level and in the permanently moist zone. Certainly Ames does not provide such a suggestion because that reference is also silent on the relationship between the permanently moist zone and a zone susceptible to drying out.

For these reasons, we conclude that claims 4 and 5 would not have been obvious at the time the invention was made. The solicitor’s brief does not persuade us otherwise. Accordingly, the board’s decision is reversed.

Reversed.

      . Serial No. 713,645 filed March 18, 1968.


author: ROSS, Circuit Judge.

text:
    The KAHLER CORPORATION, Appellee, v. COMMISSIONER OF INTERNAL REVENUE, Appellant.
    No. 72-1663.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 10, 1973.
    Decided Oct. 5, 1973.

      Richard W. Perkins, Atty., Tax Div., Dept, of Justice, Washington, D. C., for appellant.
    Robert J. Johnson and John W. Wind-horst, Jr., Minneapolis, Minn., for appel-lee.
    Before VAN OOSTERHOUT, Senior Circuit Judge, and LAY and ROSS, Circuit Judges.
   ROSS, Circuit Judge.

This is an appeal from a decision of the United States Tax Court, 58 T.C. 496, favorable to the taxpayer. The Tax Court rejected the Commissioner’s allocation, under 26 U.S.C. § 482, of interest income to a parent corporation as a result of interest free loans made by the parent to its subsidiaries. We reverse with directions to enter judgment in favor of the Commissioner.

The Kahler Corporation (Kahler) has for many years owned and operated a hotel in Rochester, Minnestota. In the early 1960’s Kahler established seven wholly owned subsidiaries to operate and manage new hotel or motel properties outside of Rochester. These subsidiary corporations were funded by Kahler. A small portion of the required capital was contributed by Kahler in exchange for all of the stock of the subsidiary. The balance of the required capital was loaned by Kahler on an interest free basis. These advances had no fixed maturity date but were reflected as debts on the books of both the parent and the subsidiaries and were repaid without interest from time to time thereafter.

During the taxable years here involved, 1965 and 1966, four of these subsidiaries were indebted to Kahler in the following amounts:

Dec. 31,1964 Dec. 31,1965 Dec. 31,1966

K.F.M. $ 325,000 $ 315,000 $ 293,000

Mankato 865,000 785.000 1,195,000

Oak Manor none 335.000 215.000

Owatonna 485,000 425.000 385.000

Total $1,675,000 $1,860,000 $2,088,000

During each of these taxable years, loan repayments were made by the subsidiaries to Kahler although K.F.M and Mankato increased the debt they owed to Kahler. No interest was paid by the subsidiaries on these loans. All of the interest paid by Kahler to banks and to Northwestern Mutual Life Insurance Company was deducted by Kahler as an ordinary expense of business on its federal income tax return. None of this interest expense was charged by Kahler to its subsidiaries and none of it was claimed by the subsidiaries as deductions on their separate federal income tax returns. During oral argument counsel for Kahler conceded that during 1965 and 1966, Kahler owed and paid interest on total indebtedness exceeding the total then owed to Kahler by these four subsidiaries.

Since Kahler's income was substantial, Kahler had a tax benefit from the interest deduction of 48%. If Kahler had charged interest to its subsidiaries, its income would have increased and the tax on the increased income would have been 48%. If the subsidiaries had paid interest to Kahler, they would have been able to deduct it, but much of the benefit of those deductions would have been at the 22% rate. Obviously it was to Kahler’s advantage, as sole owner of the subsidiaries, to claim all of the interest deduction and not charge any interest to its subsidiaries.

The Commissioner determined, pursuant to the authority of Section 482 of the 1954 Code (26 U.S.C. § 482), and related regulations, that interest income, at the rate of 5% per annum, should be allocated to Kahler and assessed a deficiency accordingly.

Correlative adjustments for each of the subsidiaries, increasing their interest expense deductions, were also proposed by the examiner. These allocations and adjustments were proposed upon the Commissioner’s determination that such allocation was necessary to clearly reflect the income of both Kahler and its subsidiaries.

The Tax Court upheld the position of Kahler on the ground that the Commissioner failed to show that the interest free advances actually produced income

to the subsidiaries and that allocation was improper in the absence of such proof. In so holding, the Tax Court relied upon a line of cases, including Huber Homes, Inc. v. Commissioner, 55 T.C. 598 (1971); PPG Industries, Inc. v. Commissioner, 55 T.C. 928 (1970); Smith-Bridgman & Co. v. Commissioner, 16 T.C. 287 (1951), aeq. 1951-1 Cum. Bull. 3; Tennessee-Arkansas Gravel Co. v. Commissioner, 112 F.2d 508 (6th Cir. 1940), which hold that income cannot be created from a transaction where none was actually realized. The Commissioner appealed to this Court citing the recent ease of B. Forman Company v. Commissioner, 453 F.2d 1144 (2nd Cir.), cert, denied, 407 U.S. 934, 92 S.Ct. 2458, 32 L.Ed.2d 817, rehearing denied, 409 U.S. 899, 93 S.Ct. 102, 34 L.Ed.2d 158 (1972). We agree with the position taken by the Commissioner and by the Second Circuit in Forman.

In Forman two corporations joined together to form a third corporation with each of the controlling corporations owning 50% of the stock of the new corporation. Each of the controlling corporations made $1,000,000 interest free loans to the newly created corporation. The Second Circuit held that the Commissioner’s allocation of 5% interest, as income to the two controlling corporations, was proper under the regulation and that the regulation was consistent with the scope and purpose of Section 482.

In this ease there is no- question that the Commissionei*’s allocation of interest income to Kahler, is consistent with treasury regulation 1.482-2. Therefore, the primary question with which we are presented is whether or not the regulation is unreasonable or clearly inconsistent with the statute. Treasury regulations constitute contemporaneous construction by those charged with administration of these statutes and should not be overruled except for weighty reasons. Commissioner v. South Texas Co., 333 U.S. 496, 68 S.Ct. 695, 92 L.Ed. 831 (1948); B. Forman Company v. Commissioner, supra, 453 F.2d at 1152. We find no such weighty reasons present here.

In determining that the regulation was reasonable and correctly applied to a similar situation, the Second Circuit stated:

“These regulations must prevail, for they are entirely consistent with the scope and purpose of § 482. The instant loans without interest are obviously not at arm’s length, since no unrelated parties would loan such large sums without interest. The allocation of the interest income to taxpayers was necessary in order to properly reflect their taxable incomes.” B. For-man Company v. Commissioner, supra, 453 F.2d at 1156.

The claim that the Commissioner may not create income where none actually existed and thus that the regulations were inapplicable was also analyzed correctly by the Second Circuit in Forman:

“Taxpayers have advanced an argument, supported by case law, that the Commissioner may not create income where none actually existed. In Tennessee-Arkansas Gravel Co. v. Commissioner of Internal Revenue, 112 F. 2d 508 (6th Cir. 1940), the court held that the Commissioner could not increase the income of a taxpayer whose property had been used by a related corporation without the payment of rent. The court concluded that, since no rent was called for, none could be created. In Smith-Bridgman & Co. v. Commissioner, 16 T.C. 287 (1951), the Commissioner had added interest to the taxable income of Smith-Bridgman & Co., as allegedly constituting interest which should have been charged by it .on noninterest bearing loans to its parent corporation, Continental Department Stores (Continental). Taxpayer did not report as income any interest on these loans. The Tax Court, in overruling the Commissioner, who had allocated interest to Smith-Bridgman, refused to authorize the creation of income where no income was realized. This decision was thought to rest on the fact that the Commissioner had added interest to taxpayer, but had failed to make an adjustment to the income of Continental. However, the rationale of Smith-Bridgeman (sic) was clarified in Huber Homes, Inc. v. Commissioner, 55 T.C. 598 (1971), where it was held that the failure to make the adjustment was only a possible supporting factor, not a controlling factor. Smith was reaffirmed in PPG, Industries, Inc. v. Commissioner, 55 T.C. 928 (1970), where the Tax Court held that § 482 did not authorize the Commissioner to impute interest on non-interest bearing loans where in fact no interest was created.
Several cases have held that one related party is not required to charge another related party interest on a loan; that the lender is not to be taxed on interest, with respect to a loan, where it was not intended that interest be collected. . . .
To the extent that the above cases cited by taxpayers may be read as holding that no interest can be allocated under § 482 under the facts of this case, they are not in accord with either economic reality, or with the declared purpose of section 482. They seriously impair the usefulness of § 482. Those cases may be correct from a pure accounting standpoint. Nevertheless, interest income may be added to taxpayers’ incomes, as long as a correlative adjustment is made to Midtown, for then the true taxable income of all involved will be properly reflected.” B. Forman Company v. Commissioner, supra, 453 F.2d at 1155-1156.

The proper standard to be applied in cases such as this is whether or not the loans from the taxpayer to other members of a controlled group would have been made on an interest free basis in arm’s length dealings between uncontrolled taxpayers. Whether the Commissioner shows that the borrowed funds actually produced income for the borrowing corporation is of no importance. Money, and the use of money, is an essential element in the profit making activities of most corporations, just as raw material is a necessary component in the manufacture of salable goods.

In this case we have a situation in which the parent corporation has borrowed money at rates in excess of 5% and has deducted the interest paid on those loans in determining its taxable income. In turn it has loaned a portion of that money to wholly owned subsidiaries, without interest. In so doing the combined tax liability of the parent and its subsidiaries was substantially reduced. In order to correctly reflect the true income of each of the subsidiaries and the parent, the Commissioner allocated income to the parent in an amount equal to 5% per annum on the outstanding loan balances. It is difficult to imagine a situation in which Section 482 would be more applicable on either an equitable or a legal basis.

Kahler claims in the alternative that the Commissioner abused his discretion in applying the regulations retroactively; that management fees paid by the subsidiaries to Kahler actually reflected compensation attributable to the interest free advances; and that the advances by Kahler to one of the subsidiaries (Man-kato) actually constituted a capital investment to the extent of $500,000 since that amount was reclassified by Kahler and Mankato in 1968 from debt to equity.

We have examined each of these contentions and have found them to be without merit. 26 U.S.C. § 7805(b) empowers the Commissioner to prescribe the extent, if any, to which any regulation will be applied retroactively. The Commissioner has broad discretion to determine whether to apply these regulations retroactively. In our opinion that discretion was not abused in this case. See generally Automobile Club v. Commissioner, 353 U.S. 180, 77 S.Ct. 707, 1 L.Ed.2d 746 (1957).

The management fee paid by the subsidiaries to Kahler is shown from the record to be exactly that and not a substitute for interest. As to the 1968 capitalization of $500,000 of Mankato’s debt to Kahler it need only be pointed out that during the taxable years in question, 1965 and 1966, the entire amount of the loan to Mankato was shown on the books of both corporations as debt-not as invested capital.

For the reasons hereinbefore set forth the judgment of the Tax Court is reversed and the case is remanded with directions to enter judgment for the Commissioner.

      . During 1965 and 1966, Kahler was indebted in substantial sums to Minneapolis and Rochester banks.

      . During the years in question, Owatonna and Mankato were indebted to Northwestern Mutual on a mortgage loan made in 1961, in the original principal amount of 84,500,000.
      Even though Owatonna and Mankato gave the note and mortgage, the funds were disbursed to Kahler and all principal and interest payments were made by Kahler.

      . The group did not file a consolidated tax return under 26 U.S.C. § 1501, but rather opted to file separate returns.

      . Section 482 provides :
      “In any case of two or more organizations, trades, or businesses (whether or not incorporated, whether or not organized in the United States, and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the Secretary or his delegate may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such organizations, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses.”

      . The applicable regulations are Treas.Reg. § 1.482-2 (a) (1968) :
      “§ 1.482-2 Determination of tamable income in specific situations

      (a) Loans or advances — (1) In general. Where one member of a group of controlled entities make a loan or advance dii-ectly or indirectly to, or otherwise becomes a creditor of, another member of such group and charges no interest, or charges interest at a rate which is not equal to an arm’s length rate as defined in subparagraph (2) of this paragraph, the district director may make appropriate allocations to reflect an arm’s length interest rate for the use of such loan or advance.”

      . Forman involved a problem not present in this case since the “subsidiary” was the offspring of two “parent” corporations. Here all of the stock of the subsidiaries in question was owned by Kahler so there is no question of “common control”.

      . We find no support in the legislative history of Section 482 for the claim that transactions between controlled corporations must be traced to the production of gross income. The express purpose of that statute is the prevention of tax evasion (by the shifting of profits, the making of fictitious sales, and other methods frequently adopted for the purposes of milking). H.R.Rep.No.2, 70th Cong., 1st Sess.; S.Rep.No.960, 70th Cong., 1st Sess.

      . It would have been entirely proper in this case for the Commissioner to have allocated to the subsidiaries a portion of the interest deduction taken by Kahler for interest paid to the banks and to Northwestern Mutual. Since the actual interest paid by Kahler exceeded 5%, the deficiency assessed against it would have been greater if the Commissioner had chosen to allocate the interest deduction rather than allocate income.


author: STEVENS, Circuit Judge.

text:
    Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. LOCAL 551, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, INC., Defendant-Appellee.
    No. 73-1707.
    United States Court of Appeals, Seventh Circuit.
    Decided Aug. 13, 1973.

      Beate Bloche, U. S. Dept, of Labor, Washington, D. C., Herman Grant, James R. Thompson, U. S. Atty., William T. Huyck and James K. Toohey, Asst. U. S. Attys., Chicago, 111., for plaintiff-appellant.
    Irving M. Friedman, Chicago, 111., for defendant-appellee.
    Before PELL, STEVENS, and SPRECHER, Circuit Judges.
   MEMORANDUM ORDER

STEVENS, Circuit Judge.

This matter is before the Court on defendant-appellee’s Motion to Amend this Court’s order of August 3, 1973, and plaintiff’s motion for order directing defendant-appellee to prepare and mail notices of new election. In our order of August 3, 1973, we denied the plaintiff-appellant’s Motion for Summary Reversal of the district court’s order which had been entered August 2, 1973 and which denied plaintiff’s motion to postpone the Union election from August 7, 1973, to August 22, 1973. The denial was based on the grounds (1) that we did not have the benefit of a response from defendant-appellee and the exigencies of the situation required prompt disposition, and (2) since it was evident that the Secretary had a reasonable basis for postponing the election, an election held on August 7 without his approval would not comply with the order of June 18, 1973 directing an election “under the supervision of the Secretary” at the earliest practicable date, and therefore the conduct of the election on August 7 without the approval of the Secretary would merely be a useless act without adverse consequences except to the Union’s treasury.

We now have the benefit of the defendant’s argument and the transcript of the oral opinion of the district court; further reflection has persuaded us that the district court’s order of August 3, 1973, should have been reversed. We now vacate that order and direct that a new order be entered setting the election on the earliest practicable date acceptable to the Secretary.

We are convinced that this action is necessary because papers filed by defendant-appellee reveal misconceptions that must not be permitted to frustrate the purpose of this litigation and its further processing in an orderly fashion.

First: The Secretary’s power to supervise an election required by a court order clearly includes the power to set the date of that election. That date should not be fixed until after the Secretary has consulted with interested parties, including the incumbent leadership of the Union, but such consultation is not in any sense comparable to a negotiation between equal parties. The decision which the Secretary makes is his decision; it must not be arbitrary or capricious, but it is not equivalent to a negotiated consent decree. The Secretary’s determination of an election date is subject to revision at any time if he has reasonable grounds for concluding that a different date is necessary to ensure a fair and representative election. He should consider the various factors, such as expense, possible impact on impending negotiations, or any other matters that he, in his impartial expertise, deems relevant. But the weight to be accorded such factors is, in the first instance, for him to decide.

Second: If the Union, or its incumbent leadership, or any other interested party, wishes to object to any action taken by the Secretary in his supervisory capacity, that party assumes a heavy burden of persuasion and proof. If there is procedural irregularity (such as a complete lack of any opportunity to object or to explain), evidence of bias, or if the Secretary’s action is manifestly arbitrary, such an interested party may be able to demonstrate that judicial intervention in advance of the election is necessary. Otherwise, generally speaking, the Secretary’s decisions taken in his supervisory capacity must be heeded. If a dispute arises over the election date, the burden — and in our opinion it is a heavy one — is on the objector, not the Secretary.

Third: In this case the decision of the Secretary to postpone the election was not arbitrary or unreasonable. His action must, of course, he judged on the basis of the facts available to him when his decision was made. Defendant’s proffer of evidence relating to the actual turnout at the unsupervised election on August 7 is completely irrelevant. Even if we assume arguendo that the Secretary’s decision was erroneous or unwise; it was nevertheless a decision which he had the power to make and which the law requires affected parties to respect. The Secretary’s representation— that when he originally set August 7 as the election date he had not known the plant would be shut down at that time — is not questioned. We have no doubt that the Secretary could reasonably fear that an election held when a substantial number of employees would probably be on vacation would not be representative. This conclusion is unaffected by the defendant’s representations as to the actual turnout. For an election conducted in defiance of the Secretary’s command is itself affected by an extraneous factor that the statute does not contemplate.

The decision of the district court as explained in his oral opinion erroneously rested on the assumption that the Secretary had the burden of proving irreparable injury and establishing the kind of extraordinary facts that would justify a modification of a consent decree. Moreover, the district court seemed to assume that the general policy of avoiding judicial interference in internal Union affairs was applicable. In our opinion, however, the stipulation that a new election be conducted “under the supervision of the plaintiff, as provided in Section 402(e) of the Act” gave him the same remedial authority as if the violations alleged in his complaint had been established by proof. Since the Secretary’s intervention was properly invoked in this case, the following comments by the Supreme Court in Wirtz v. Bottle Blowers Assn., 389 U.S. 463, 472-475, 88 S.Ct. 643, 649, 19 L. Ed.2d 705 are pertinent: (The emphasis and footnotes are the Supreme Court’s.)

“Congress has explicitly told us that these provisions were designed to preserve a ‘maximum amount of independence and self-government by giving every international union the opportunity to correct improper local elections.’ S.Rep. No. 187, 86th Cong., 1st Sess., 21, I Leg.Hist. 417.
“But it is incorrect to read these provisions circumscribing the time and basis for the Secretary’s intervention as somehow conditioning his right to relief once that intervention has been properly invoked. Such a construction would ignore the fact that Congress, although committed to minimal intervention, was obviously equally committed to making that intervention, once warranted, effective in carrying out the basic aim of Title IV. Congress deliberately gave ex-elusive enforcement authority to the Secretary, having “decided to utilize the special knowledge and discretion of the Secretary of Labor in order best serve the public interest.” Cal-hoon v. Harvey, supra. In so doing, Congress rejected other proposals, among them plans that would have authorized suits by complaining members in their own right. And Congress unequivocally declared that once the Secretary establishes in court that a violation of § 401 may have affected the outcome of the challenged election, ‘the court shall declare the election . . . to be void and direct the conduct of a new election under supervision of the Secretary . . . .’ 29 U.S.C. § 482(c). (Emphasis supplied.)
“We cannot agree that this statutory scheme is satisfied by the happenstance intervention of an unsupervised election. The notion that the unlawfulness infecting the challenged election should be considered as washed away by the following election disregards Congress’ evident conclusion that only a supervised election could offer assurance that the officers who achieved office as beneficiaries of violations of the Act would not by some means perpetuate their unlawful control in the succeeding election. That conclusion was reached in light of the abuses surfaced by the extensive congressional inquiry showing how incumbents’ use of their inherent advantage over potential rank and file challengers established and perpetuated dynastic control of some unions. See S.Rep.No. 1417, 85th Cong., 2d Sess. These abuses were among the “number of instances of breach of trust . . . [and] disregard of the rights of individual employees . . . ” upon which Congress rested its decision that the legislation was required in the public interest. Congress chose the alternative of a supervised election as the remedy for a § 401 violation in the belief that the protective presence of a neutral Secretary of Labor would best prevent the unfairness in the first election from infecting, directly or indirectly, the remedial election. The choice also reflects a conclusion that union members made aware of unlawful practices could not adequately protect their own interests through an unsupervised election. It is clear, therefore, that the intervention of an election in which the outcome might be as much a product of unlawful circumstances as the challenged election cannot bring the Secretary’s action to a halt. Aborting the exclusive statutory remedy would immunize a proved violation from further attack and leave unvindicated the interests protected by § 401. Title IV was not intended to be so readily frustrated.
“Respondent argues that granting the Secretary relief after a supervening election would terminate the new officers’ tenure prematurely on mere suspicion. But Congress, when it settled on the remedy of a supervised election, considered the risk of ineum-bents’ influence to be substantial, not a mere suspicion. The only assurance that the new officers do in fact hold office by reason of a truly fair and a democratic vote is to do what the Act requires, rerun the election under the Secretary’s supervision.”

The order of June 18, 1973, specified a remedy which necessarily involves governmental intervention and supervision of a critical aspect of the Union’s activities, namely its election process. In order to achieve the purpose of the statute, the Secretary must be afforded a wide range of discretion in discharging his supervisory responsibility. The leadership of the Union must respect his authority.

The district court order of August 2, 1973, is vacated and the case is remanded to the district court with directions to enter an order directing that the election be held at the earliest practicable date to be determined by the Secretary. Said order shall require the defendant Union to prepare and mail notices under the supervision of the Secretary and to comply with all reasonable directives of the Secretary.

       This ruling was originally issued as an “Order” pursuant to Circuit Buie 28.' At the request of the Secretary, on September 19, 1973, we authorized publication as an “Opinion” within the meaning of that rule,

      . See, e. g., S.Rep.No.187, supra, n. 7, at 34, I Leg.Hist. 430: “The committee bill places heavy reliance upon reporting and disclosure to union members, the Government and the public to effect correction of abuses where they have occurred. However, the bill also endows the Secretary of Labor unth broad power to insure effectuation of its objectives ....
      “ . . . He has power to— . . .
      (e) investigate violations of the election provisions and bring court actions to overturn improperly held elections and supervise conduct of new elections .
      “The committee believes that the broad powers granted to the Secretary by this bill combined with full reporting and disclosure to Union members and the public provides a most effective combination of devices by which abuses can be remedied.” (Emphasis supplied.)

      . S. 748, 86th Cong., 1st Sess., I Leg.Hist. 84, 118-134; H.R. 8342, 86th Cong., 1st Sess., I Leg.Hist. 687, 727-729. See H.R. Conf.Rep.No.1140, 86th Cong., 1st Sess., 35, I Leg. 939.

      . See supra, at 647.