author: Mr. Justice Marshall

text:
    ZENITH RADIO CORP. v. UNITED STATES
    No. 77-539.
    Argued April 25, 1978
    Decided June 21, 1978

      MaRshall, J., delivered the opinion for a unanimous Court.

      Frederick L. Ikenson argued the cause for petitioner. With him on the briefs were Eugene L. Stewart and Philip J. Curtis.

      Solicitor General McCree argued the cause for the United States. With him on the brief were Assistant Attorney General Babcock, Deputy Solicitor General Easterbrook, Richard A. Allen, Leonard Schaitman, David M. Cohen, and Robert H. Mundheim.

      Briefs of amici curiae urging affirmance were filed by Saul L. Sherman for the American Importers Assn., Inc.; and by N. David Palmeter and David P. Houlihan for the Union des Industries de la Communauté Europeenne.
      Briefs of amici curiae were filed by Marjorie M. Shostak, S. Richard Shostak, Theodore B. Olson, and James P. O’Hara for Craig Corp. et al.; and by Robert E. Herzstein for Ford Motor Co.

   Mr. Justice Marshall

delivered the opinion of the Court.

Under § 303 (a) of the Tariff Act of 1930, 46 Stat. 687, as amended, 19 U. S. C. § 1303 (a) (1976 ed.), whenever a foreign country pays a “bounty or grant” upon the exportation of a product from that country, the Secretary of the Treasury is required to levy a countervailing duty, “equal to the net amount of such bounty or grant,” upon importation of the product into the United States. The issue in this case is whether Japan confers a “bounty” or “grant” on certain consumer electronic products by failing to impose a commodity tax on those products when they are exported, while imposing the tax on the products when they are sold in Japan.

I

Under the Commodity Tax Law of Japan, Law No. 48 of 1962, see App. 44-48, a variety of consumer goods, including the electronic products at issue here, are subject to an “indirect” tax — -a tax levied on the goods themselves, and computed as a percentage of the manufacturer’s sales price rather than the income or wealth of the purchaser or seller. The Japanese tax applies both to products manufactured in Japan and to those imported into Japan. On goods manufactured in Japan, the tax is levied upon shipment from the factory; imported products are taxed when they are withdrawn from the customs warehouse. Only goods destined for consumption in Japan are subject to the tax, however. Products shipped for export are exempt, and any tax paid upon the shipment of a product is refunded if the product is subsequently exported. Thus the tax is “remitted” on exports.

In April 1970 petitioner, an American manufacturer of consumer electronic products, filed a petition with the Commissioner of Customs, requesting assessment of countervailing duties on a number of consumer electronic products exported from Japan to this country. Petitioner alleged that Japan had bestowed a “bounty or grant” upon exportation of these products by, inter alia, remitting the Japanese Commodity Tax that would have been imposed had the products been sold within Japan. In January 1976, after soliciting the views of interested parties and conducting an investigation pursuant to Treasury Department regulations, see 19 CFR § 159.47 (c) (1977), the Acting Commissioner of Customs published a notice of final determination, rejecting petitioner's request. 41 Fed. Reg. 1298 (1976).

Petitioner then filed suit in the Customs Court, claiming that the Treasury Department had erred in concluding that remission of the Japanese Commodity Tax was not a bounty or grant within the purview of the countervailing-duty statute. The Department defended on the ground that, since the remission of indirect taxes was “nonexcessive,” the statute did not require assessment of a countervailing duty. In the Department's terminology, a remission of taxes is “nonexces-sive’' if it does not exceed the amount of tax paid or otherwise due; thus, for example, if a tax of $5 is levied on goods at the factory, the return of the $5 upon exportation would be “nonexcessive,” whereas a payment of $8 from the government to the manufacturer upon exportation would be “excessive” by $3. The Department pointed out that the current version of § 303 is in all relevant respects unchanged from the countervailing-duty statute enacted by Congress in 1897, and that the Secretary — in decisions dating back to 1898 — has always taken the position that the nonexcessive remission of an indirect tax is not a bounty or grant within the meaning of the statute.

On cross-motions for summary judgment, the Customs Court ruled in favor of petitioner and ordered the Secretary to assess countervailing duties on all Japanese consumer electronic products specified in petitioner’s complaint. 430 F. Supp. 242 (1977). The court acknowledged the Secretary’s longstanding interpretation of the statute. It concluded, however, that this administrative practice could not be sustained in light of this Court’s decision in Downs v. United States, 187 U. S. 496 (1903), which held that an export bounty had been conferred by a complicated Russian scheme for the regulation of sugar production and sale, involving, among other elements, remission of excise taxes in the event of exportation.

On appeal by the Government, the Court of Customs and Patent Appeals, dividing 3-2, reversed the judgment of the Customs Court and remanded for entry of summary judgment in favor of the United States. 64 C. C. P. A. 130, 562 F. 2d 1209 (1977). The majority opinion distinguished Downs on the ground that it did not decide the question of whether non-excessive remission of an indirect tax, standing alone, constitutes a bounty or grant upon exportation. The court then examined the language of § 303 and the legislative history of the 1897 provision and concluded that, “in determining whether a bounty or grant has been conferred, it is the economic result of the foreign government’s action which controls.” 64 C. C. P. A., at 138-139, 562 F. 2d, at 1216. Relying primarily on the “long-continued” and “uniform” administrative practice, id., at 142-143, 146-147, 562 F. 2d, at 1218-1219, 1222-1223, and secondarily on congressional “acquiescence” in this practice through repeated re-enactment of the controlling statutory language, id., at 143-144, 562 F. 2d, at 1220, the court held that interpretation of “bounty or grant” so as not to include a nonexcessive remission of an indirect tax is “a lawfully permissible interpretation of § 303.” Id., at 147, 562 F. 2d, at 1223.

We granted certiorari, 434 U. S. 1060 (1978), and we now affirm.

II

It is undisputed that the Treasury Department adopted the statutory interpretation at issue here less than a year after passage of the basic countervailing-duty statute in 1897, see T. D. 19321, 1 Synopsis of [Treasury] Decisions 696 (1898), and that the Department has uniformly maintained this position for over 80 years. This longstanding and consistent administrative interpretation is entitled to considerable weight.

“When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. ‘To sustain [an agency’s] application of [a] statutory term, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings.’ ” Udall v. Tallman, 380 U. S. 1, 16 (1965), quoting Unemployment Compensation Comm’n v. Aragon, 329 U. S. 143, 153 (1946).

Moreover, an administrative “practice has peculiar weight when it involves a contemporaneous construction of a statute by the [persons] charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new.” Norwegian Nitrogen Products Co. v. United States, 288 U. S. 294, 315 (1933); see, e. g., Power Reactor Co. v. Electricians, 367 U. S. 396, 408 (1961).

The question is thus whether, in light of the normal aids to statutory construction, the Department’s interpretation is “sufficiently reasonable” to be accepted by a reviewing court. Train v. Natural Resources Defense Council, 421 U. S. 60, 75 (1975). Our examination of the language, the legislative history, and the overall purpose of the 1897 provision persuades us that the Department’s initial construction of the statute was far from unreasonable; and we are unable to find anything in the events subsequent to that time that convinces us that the Department was required to abandon this interpretation.

A

The language of the 1897 statute evolved out of two earlier countervailing-duty provisions that had been applicable only to sugar imports. The first provision was enacted in 1890, apparently for the purpose of protecting domestic sugar refiners from unfair foreign competition; it provided for a fixed countervailing duty on refined sugar imported from countries that “pay, directly or indirectly, a [greater] bounty on the exportation of” refined sugar than on raw sugar. Tariff Act of 1890, ¶ 237, 26 Stat. 584. Although the congressional debates did not focus sharply on the meaning of the word “bounty,” what evidence there is suggests that the term was not intended to encompass the nonexcessive remission of an indirect tax. Thus, one strong supporter of increased protection for American sugar producers heavily criticized the export “bounties” conferred by several European governments, and attached a concise description of “The Bounty Systems in Europe”; both the remarks and the description indicated that the “bounties” consisted of the amounts by which government payments exceeded the excise taxes that had been paid upon the beets from which the sugar was produced. See 21 Cong. Bee. 9529, 9532 (1890) (remarks of Sen. Gibson); id., at 9537 (description). According to the description, for example, French sugar manufacturers paid an “excise tax [of] $97.06 per gross ton[,] [b]ut upon the export of a ton of sugar . . . received back as a drawback $117.60, making a clear bounty of $20.54 per gross ton of sugar exported.” Ibid.

This concept of a “net” bounty — that is, a remission in excess of taxes paid or otherwise due — as the trigger for a countervailing-duty requirement emerged more clearly in the second sugar provision, enacted in 1894. Tariff Act of 1894, ¶ 18214, 28 Stat. 521. The 1894 statute extended the countervailing-duty requirement to all imported sugar, raw as well as refined, and provided for payment of a fixed duty on all sugar coming from a country which “pays, directly or indirectly, a bounty on the export thereof.” A proviso to the statute made clear, however, that no duties were to be assessed in the event that the “bounty” did not exceed the amount of taxes already paid. The author of the 1894 provision, Senator' Jones, expressly characterized this difference between the amounts received upon exportation and the amounts already paid in taxes as the “net bounty” on exportation. 26 Cong. Rec. 5705 (1894) (discussing German export bounty system).

The 1897 statute greatly expanded upon the coverage of the 1894 provision by making the countervailing-duty requirement applicable to all imported products. Tariff Act of 1897, § 5, 30 Stat. 205, quoted in n. 8, supra. There are strong indications, however, that Congress intended to retain the “net bounty” concept of the 1894 provision as the criterion for determining when a countervailing duty was to be imposed. Although the proviso in the 1894 law was deleted, the 1897 statute did provide for levying of duties equal to the “net amount” of any export bounty or grant. And the legislative history suggests that this language, in addition to establishing a responsive mechanism for determining the appropriate amount of countervailing duty, was intended to incorporate the prior rule that nonexcessive remission of indirect taxes would not trigger the countervailing-duty requirement at all.

There is no question that the prior rule was carried forward in the version of the 1897 statute that originally passed the House. This version did not extend the countervailing-duty requirement to all imports. Instead, it merely modified the 1894 sugar provision so that the amount of the countervailing duty, rather than being fixed, would be “equal to [the export] bounty, or so much thereof as may be in excess of any tax collected by [the foreign] country upon [the] exported [sugar], or upon the beet or cane from which it was produced . . . .” See 30 Cong. Rec. 1634 (1897). The House Report unequivocally stated that the countervailing duty was intended to be “equivalent to the net export bounty paid by any country.” H. R. Rep. No. 1, 55th Cong., 1st Sess., 4r-5 (1897) (emphasis supplied).

The Senate deleted the House provision from the bill and replaced it with the more general provision that was eventually enacted into law. See 30 Cong. Rec. 1733 (1897) (striking House provision); id., at 2226 (adopting general provision) ; id., at 2705, 2750 (House agreement to Senate amendment). The debates in the Senate indicate, however, that — aside from extending the coverage of the House provision — the Senate did not intend to change its substance. Senator Allison, the sponsor of the Senate amendment, explained that the House provision was being “stricken from the bill,” because “the same paragraph in substance [is] being inserted [in] section [5], making this countervailing duty apply to all articles instead of to [sugar] alone.” Id., at 1635. See also id., at 1732 (remarks of Sen. White). Senator Allison twice remarked that the countervailing duty that he was proposing was an “imitation” of the one provided in the 1894 statute, id., at 1719; see id., at 1674, and later in the debates he stated — in response to a question as to whether the countervailing duty would be equal to “the whole amount of the export bounty” — that “[the bounty contemplated] is the net bounty, less the taxes and reductions . . . id., at 1721 (answering question from Sen. Vest).

An additional indication of the Senate’s intent can be found in the extended discussion of the effect that the statute would have with respect to German sugar exports. Time after time the amount of the German “bounty” — and, correspondingly, the amount of the countervailing duty that would be imposed under the statute — was stated to be 38$ per 100 pounds of refined sugar, and 270 per 100 pounds of raw sugar. See, e. g., id., at 1650 (remarks of Sens, Allison, Vest, and Caffery), 1658 (Sens. Allison and Jones), 1680 (Sen. Jones), 1719 (Sens. Allison and Lindsay), 1729 (Sen. Caffery), 2823-2824 (Sens. Aldrich and Jones). These figures were supplied by the Treasury Department itself, see id., at 1719 (remarks of Sen. Allison), 1722 (letter from Treasury Department to Sen. Caf-fery), and were utilized by both proponents and opponents of the measure. And yet it was frequently acknowledged during the debates that Germany exempted sugar exports from its domestic consumption tax of $2.16 per 100 pounds, an amount far in excess of the 380 and 270 figures. See, e. g., id., at 1646 (remarks of Sen. Vest), 1651 (Sen. Caffery), 1697 (same), 2205 (same). Had the Senators considered the mere remission of an indirect tax to be a “bounty,” it seems unlikely that they would have stated that the German “bounties” were only 380 and 270 per 100 pounds. Especially in light of the strong opposition to countervailing duties even of the magnitude of 380 and 270, see, e. g., id., at 1719 (remarks of Sen. Lindsay), 2203-2205 (remarks of Sen. Gray), it seems reasonable to infer that Congress did not intend to impose countervailing duties of many times this magnitude.

B

Regardless of whether this legislative history absolutely compelled the Secretary to interpret “bounty or grant” so as not to encompass any nonexcessive remission of an indirect tax, there can be no doubt that such a construction was reasonable in light of the statutory purpose. Cf. Mourning v. Family Publications Service, Inc., 411 U. S. 356, 374 (1973). This purpose is relatively clear from the face of the statute and is confirmed by the congressional debates: The countervailing duty was intended to offset the unfair competitive advantage that foreign producers would otherwise enjoy from export subsidies paid by their governments. See, e. g., 30 Cong. Rec. 1674 (remarks of Sen. Allison), 2205 (Sen. Caffery), 2225 (Sen. Lindsay) (1897). The Treasury Department was well positioned to establish rules of decision that would accurately carry out this purpose, particularly since it had contributed the very figures relied upon by Congress in enacting the statute. See Zuber v. Allen, 396 U. S. 168, 192 (1969).

In deciding in 1898 that a nonexcessive remission of indirect taxes did not result in the type of competitive advantage that Congress intended to counteract, the Department was clearly acting in accordance with the shared assumptions of the day as to the fairness and economic effect of that practice. The theory underlying the Department’s position was that a foreign country’s remission of indirect taxes did not constitute subsidization of that country’s exports. Rather, such remission was viewed as a reasonable measure for avoiding double taxation of exports — once by the foreign country and once upon sale in this country. As explained in a recent study prepared by the Department for the Senate Committee on Finance:

“ [The Department’s construction was] based on the principle that, since exports are not consumed in the country of production, they should not be subject to consumption taxes in that country. The theory has been that the application of countervailing duties to the rebate of consumption [and other indirect] taxes would have the effect of double taxation of the product, since the United States would not only impose its own indirect taxes, such as Federal and state excise taxes and state and local sales taxes, but would also collect, through the use of the countervailing duty, the indirect tax imposed by the exporting country on domestically consumed goods.” Senate Committee on Finance, Executive Branch GATT Studies, 93d Cong., 2d Sess., 17-18 (1974).

This intuitively appealing principle regarding double taxation had been widely accepted both in this country and abroad for many years prior to enactment of the 1897 statute. See, e. g., Act of July 4, 1789, § 3, 1 Stat. 26 (remission of import duties upon exportation of products); 4 Works and Correspondence of D. Ricardo 216-217 (pamphlets and papers first published in 1822); A. Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Book Four, ch. IV (1776).

C

The Secretary’s interpretation of the countervailing-duty statute is as permissible today as it was in 1898. The statute has been re-enacted five times by Congress without any modification of the relevant language, see n. 8, supra, and, whether or not Congress can be said to have “acquiesced” in the administrative practice, it certainly has not acted to change it. At the same time, the Secretary’s position has been incorporated into the General Agreement on Tariffs and Trade (GATT) , which is followed by every major trading nation in the world; foreign tax systems as well as private expectations thus have been built on the assumption that countervailing duties would not be imposed on nonexcessive remissions of indirect taxes. In light of these substantial reliance interests, the longstanding administrative construction of the statute should “not be disturbed except for cogent reasons.” McLaren v. Fleischer, 256 U. S. 477, 481 (1921); see Udall v. Tallman, 380 U. S., at 18.

Aside from the contention, discussed in Part III, infra, that the Department’s construction is inconsistent with this Court’s decisions, petitioner’s sole argument is that the Department’s position is premised on false economic assumptions that should be rejected by the courts. In particular, petitioner points to “modern” economic theory suggesting that remission of indirect taxes may create an incentive to export in some circumstances, and to recent criticism of the GATT rules as favoring producers in countries that rely more heavily on indirect than on direct taxes. But, even assuming that these arguments are at all relevant in view of the legislative history of the 1897 provision and the longstanding administrative construction of the statute, they do not demonstrate the unreasonableness of the Secretary’s current position. Even “modem” economists do not agree on the ultimate economic effect of remitting indirect taxes, and — given the present state of economic knowledge — it may be difficult, if not impossible, to measure the precise effect in any particular case. See, e. g., Executive Branch GATT Studies, supra, at 13-14, 17; Marks & Malmgren, Negotiating Nontariff Distortions to Trade, 7 L. & Policy in Int’l Bus. 351 (1975). More fundamentally, as the Senate Committee with responsibility in this area recently stated, “the issues involved in applying the countervailing duty law are complex, and . . . internationally, there is [a] lack of any satisfactory agreement on what constitutes a fair, as opposed to an ‘unfair,’ subsidy.” S. Rep. No. 93-1298, p. 183 (1974). In this situation, it is not the task of the judiciary to substitute its views as to fairness and economic effect for those of the Secretary.

Ill

Notwithstanding all of the foregoing considerations, this would be a very different case if, as petitioner contends, the Secretary’s practice were contrary to this Court’s decision in Downs v. United States, 187 U. S. 496 (1903). Upon close examination of the admittedly opaque opinion in that case, however, we do not believe that Downs is controlling on the question presented here.

The Russian sugar laws at issue in Downs were, as the Court noted, “very complicated.” Id., at 502. Much of the Court’s opinion was devoted to an exposition of these provisions, see id., at 502-512, but for present purposes only two features are relevant: (1) excise taxes imposed on sugar sales within Russia were remitted on exports; and (2) the exporter received, in addition, a certificate entitling its bearer to sell an amount of sugar in Russia, equal to the quantity exported, without paying the full excise tax otherwise due. This certificate was transferable and had a substantial market value related to the amount of tax forgiveness that it carried with it.

The Secretary, following the same interpretation of the statute that he followed here, imposed a countervailing duty based on the value of the certificates alone, and not on the excise taxes remitted on the exports themselves. Downs, the importer, sought review, claiming that the Russian system did not confer any countervailable bounty or grant within the meaning of the 1897 statute. He did not otherwise challenge the amount of the duty assessed by the Secretary.

The issue as it came before this Court, therefore, was whether a nonexcessive remission of an indirect tax, together with the granting of an additional benefit represented by the value of the certificate, constituted a “bounty or grant.” Since the amount of the bounty was not in question, neither the parties nor this Court focused carefully on the distinction between remission of the excise tax and conferral of the certificate. Petitioner argues, however, that certain broad language in the Court’s opinion suggests that mere remission of a tax, even if nonexcessive, must be considered a bounty or grant within the meaning of the statute. Petitioner relies in particular on the following language:

“The details of this elaborate procedure for the production, sale, taxation and exportation of Russian sugar are of much less importance than the two facts which appear clearly through this maze of regulations, viz.: that no sugar is permitted to be sold in Russia that does not pay an excise tax of R. 1.75 per pood, and that sugar exported pays no tax at all. . . . When a tax is imposed upon all sugar produced, but is remitted upon all sugar exported, then, by whatever process, or in whatever manner, or under whatever name it is disguised, it is a bounty upon exportation.” Id., at 515.

This passage is inconsistent with both preceding and subsequent language which suggests that the Court understood the “bounty” to reside in the value of the certificates. At one point the Court stated that “[t]he amount [the exporter] receives for his export certificate [on the market], say, R. 1.25, is the exact amount of the bounty he receives upon exportation . . . .” Ibid. And the Court in conclusion specifically endorsed the Fourth Circuit’s holding to the same effect, see n. 17, supra:

“[T]he Circuit Court of Appeals found: 'That the Russian exporter of sugar obtained from his government a certificate, solely because of such exportation, which is worth in the open market of that country from R. 1.25 to R. 1.64 per pood, or from 1.8 to 2.35 cents per pound. ■ Therefore we hold that the government of Russia does secure to the exporter of that country, as the inevitable result of its action, a money reward or gratuity whenever he exports sugar from Russia.’ We all concur in this expression of opinion.” 187 U. S., at 516.

Given this other language, we cannot read for its broadest implications the passage on which petitioner relies. In our view the passage does no more than establish the proposition that an excessive remission of taxes — there, the combination of the exemption with the certificates — is an export bounty within the meaning of the statute.

As the court below noted, “ '[i]t is a maxim, not to be disregarded, that general expressions, in every opinion, are to be taken in connection with the case in which those expressions are used/ ” 64 C. C. P. A., at 134, 562 F. 2d, at 1213, quoting Cohens v. Virginia, 6 Wheat. 264, 399 (1821). No one argued in Downs that a nonexcessive remission of taxes, standing alone, would have constituted a bounty on exportation, and indeed that issue was not presented on the facts of the case. It must also be remembered, of course, that the Court did affirm the Secretary’s decision, and that decision rested on the conclusion that a bounty had been paid only to the extent that the remission exceeded the taxes otherwise due. In light of all these circumstances, the isolated statement in Downs relied upon by petitioner cannot be dispositive here.

The judgment of the Court of Customs and Patent Appeals is, accordingly,

Affirmed.

       Section 303 (a) provides in relevant part:
      “(1) Whenever any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation, shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article or merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, then upon the importation of such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by remanufaeture or otherwise, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed.
      “(5) The Secretary shall from time to time ascertain and determine, or estimate, the net amount of each such bounty or grant, and shall declaje the net amount so determined or estimated.
      “(6) The Secretary shall make all regulations he deems necessary for the identification of articles and merchandise subject to duties under this section and for the assessment and collection of such duties. All determinations by the Secretary under this section, and all determinations by the Commission under subsection (b) (1) of this section (whether affirmative or negative) shall be published in the Federal Register.” 19 U. S. C. § 1303 (a) (1976 ed.).

       See App. 12-13, 30-31; An Outline of Japanese Taxes 128-129 (Tax Bureau, Japanese Ministry of Finance, 1976). For the products at issue here, the rate of taxation apparently ranges from 15% to 20%. See App. 13-14; An Outline of Japanese Taxes, swpra, at 131.

       For purposes of this opinion, we adopt the convention followed by the parties and use the term “remission” to encompass both the exemption of exports from initial taxation and the refund to the exporter of any taxes already paid.

       The Secretary of the Treasury has delegated the authority to make countervailing-duty determinations to the Commissioner of Customs, subject to the Secretary’s approval. See 19 CFR § 159.47 (1977).

       The products included television receivers, radio receivers, radio-phonograph combinations, radio-television-phonograph combinations, radio-tape-recorder combinations, record players and phonographs complete with amplifiers and speakers, tape recorders, tape players, and color television picture tubes. See 37 Fed. Reg. 10087, App. A*(1972), as amended, 37 Fed. Reg. 11487 (1972).

         The notice stated in relevant part that “on the basis of the . . . facts gathered and the investigation conducted pursuant to . . . Customs Regulations ... a final determination is hereby made . . . that ... no bounty or grant is being paid or bestowed, directly or indirectly, within the meaning of section 303 . . . upon the . . . exportation of certain consumer electronic products from Japan.” 41 Fed. Reg. 1298 (1976).

       Suit was filed pursuant to a provision, enacted in 1975, authorizing American manufacturers, producers, and wholesalers to seek review in the Customs Coúrt of administrative decisions not to impose countervailing duties under § 303. Tariff Act of 1930, as amended, § 516 (d), 19 U. S. C. § 1516(d) (1976 ed.). '

       Section 5 of the Tariff Act of July 24, 1897, 30 Stat. 205, provided in full:
      “That whenever any country, dependency, or colony shall pay or bestow, directly or indirectly, any bounty or grant upon the exportation of any article or merchandise from such country, dependency, or colony, and such article or merchandise is dutiable under the provisions of this Act, then upon the importation of any such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by remanufacture or otherwise, there shall be levied and paid, in all such cases, in addition to the duties otherwise imposed by this Act, an additional duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. The net amount of all such bounties or grants shall be from time to time ascertained, determined, and declared by the Secretary of the Treasury, who shall make all needful regulations for the identification of such articles and merchandise and for the assessment and collection of such additional duties.”
      The current version of § 303 represents the fifth re-enactment of the 1897 provision without any changes relevant here. Tariff Act of 1909, § 6, 36 Stat. 85; Tariff Act of 1913, § IV (E), 38 Stat. 193; Tariff Act of 1922, § 303, 42 Stat. 935; Tariff Act of 1930, § 303, 46 Stat. 687; Trade Act of 1974, § 331 (a), 88 Stat. 2049.

       There is no dispute here regarding either the nonexcessive nature of the remission or the indirect nature of the tax. Moreover, although the Department did not so state in the notice of final determination, see n. 6, supra, petitioner does not dispute that the Department’s decision in this case was based on its longstanding position that the nonexcessive remission of an indirect tax is not a bounty or grant.

       See, e. g., T. D. 19729, 2 Synopsis of Decisions 157 (1898); T. D. 20039, 2 Synopsis of Decisions 534 (1898); T. D. 43634, 56 Treas. Dec. 342 (1929); T. D. 49355, 73 Treas. Dec. 107 (1938).

       The proviso specified that
      “the importer of sugar produced in a foreign country, the Government of which grants such direct or indirect bounties, may be relieved from this additional duty under such regulations as the Secretary of the Treasury may prescribe, in case said importer produces a certificate of said Government that no indirect bounty has been received upon said sugar in excess of the tax collected upon the beet or cane from which it was produced, and that no direct bounty has been or shall be paid . . . .” 28 Stat. 521 (emphasis added).

       The figures of 380 and 270 per 100 pounds apparently represented the amount of direct bounty paid upon exportation. See, e. g., 30 Cong. Rec. 1722 (1897) (letter from Treasury Department).
      Petitioner argues that the Senate mudt have intended the term “bounty” to include nonexcessive remissions of indirect taxes, since Germany collected a tax on the output of sugar factories that was not remitted upon exportation and yet was not subtracted from the figures of 380 and 270 cited as the “bounties” paid by Germany. The sole evidence cited by petitioner to show that Germany in fact collected such a tax is an exhibit to the testimony of a single witness during hearings conducted by the House in 1896. See Tariff Hearings before the House Committee on Ways and Means, 54th Cong., 2d Sess., 617-618 (1896-1897). We have been unable to find any references to this tax anywhere in the Senate debates; moreover, to the extent that anyone contemplated the existence of German taxes that were not remitted upon exportation, the assumption appears to have been that they would be deducted from the 380 and 270 figures in determining the net amount of the bounty to be countervailed. The following exchange between Senators Allison and Vest is illustrative:
      “Mr. VEST. What ... is the amount of export bounty, taking out taxes, etc., granted by Germany?
      “Mr. ALLISON. ... Of course it can-not exceed three-eighths of a cent a pound — thirty-eight one-hundredths on refined sugar — nor can it exceed twenty-seven one-hundredths upon raw sugar. But it may be very much less.” 30 Cong. Ree. 1721 (1897).
      We note in any event that the amount of the tax cited by petitioner was less than 20 per 100 pounds, see Tariff Hearings, supra, at 617, whereas the consumption tax — which concededly was remitted upon exportation and yet not added to the figures of 380 and 270 — was in the vicinity of $2.16 per 100 pounds.

       Article VI (3) of the GATT, adopted in 1947, 61 Stat. A24, provides that “[n]o product . . . imported into the territory of any other contracting party shall be subject to . . . countervailing duty by reason of the exemption of such product from . . . taxes borne by the like product when destined for consumption in the country of origin or exportation, or by reason of the refund of such . . . taxes.” The Government does not contend that the GATT provision would supersede § 303 in the event of conflict between the two. Brief for United States 19 n. 11.

       See, e. g., Marks & Malmgren, Negotiating Nontariff Distortions to Trade, 7 L. & Policy in Int’l Bus. 327, 351-355 (1975); The United States Submission on Border Tax Adjustments to Working Party No. 4 of the Council on Border Tax Adjustments, Organisation for Economic Cooperation and Development (1966), reprinted in App. 93-116; Paper Submitted by John R. Petty, Assn’t Sec’y of the Treasury, Twenty-First Annual Conference of the Canadian Tax Foundation (1968), reprinted in App. 117-138. Both the Secretary amil GATT apparently consider remissions of direct taxes (e. g., income taxes) to be countervailable export subsidies. See Brief for United States 18 n. 10, 37-38; GATT, Basic Instruments and Selected Documents 186-187 (Supp. 1961).

       Petitioner also relies on language in G. S. Nicholas & Co. v. United States, 249 U. S. 34 (1919), suggesting that the countervailing-duty statute was intended to be read broadly. See id., at 39-41. As petitioner concedes, however, the only question before the Court in that case was whether a direct bounty on exportation of liquor from Great Britain was a “bounty or grant” within the meaning of the statute, see Brief for Petitioner 16-17, and the Court did not address the question of whether nonexeessive remission of an indirect tax fell within the statute.

       See Memorandum from the Secretary of the Treasury (1901), reprinted in App. 49-51; T. D. 20407, 2 Synopsis of Decisions 996, 997-998 (1898); T. D. 22814, 4 Treas. Dec. 184 (1901); Downs v. United States, 113 F. 144, 145 (CA4 1902).

       In rejecting Downs’ claim, both the United States Board of General Appraisers and the Fourth Circuit Court of Appeals identified the “bounty” as residing in the value of the certificates granted upon exportation. See T. D. 22984, 4 Treas. Dec. 405, 410-411, 413 (1901); Downs v. United States, supra, at 145.

       The Court also noted that “[i]t is practically admitted in this case that a bounty equal to the value of [the] certificates is paid by the Russian government, and the main argument of the petitioner is addressed to the proposition that this bounty is paid, not upon exportation, but upon production.” 187 U. S., at 512. This latter argument was based on the fact that the 1897 statute covered only bounties on exportation and not those on production. In 1922, Congress amended the statute to cover bounties on production and manufacture as well as exportation. Tariff Act of 1922, supra, n. 8.


source: Caselaw Access Project

author: Me. Justice Stevens

license: Public Domain

text:
    COOPERS & LYBRAND v. LIVESAY et al.
    No. 76-1836.
    Argued March 22, 1978
    Decided June 21, 1978

      SteveNS, J., delivered the opinion for a unanimous Court.

      Thomas C. Walsh argued the cause for petitioner. With him on the briefs were Veryl L. Riddle, John J. Hennelly, Jr., and Harris J. Amhowitz.

      Melvyn I. Weiss argued the cause for respondents. With him on the brief were Lawrence Milberg, Jared Specthrie, and Richard L. Ross.

   Me. Justice Stevens

delivered the opinion of the Court.

The question in this case is whether a district court’s determination that an action may not be maintained as a class action pursuant to Fed. Rule Civ. Proc. 23 is a “final decision” within the meaning of 28 U. S. C. § 1291 and therefore appealable as a matter of right. Because there is a conflict in the Circuits over this issue, we granted certiorari and now hold that such an order is not appealable under § 1291.

Petitioner, Coopers & Lybrand, is an accounting firm that certified the financial statements in a prospectus issued in connection with a 1972 public offering of securities in Punta Gorda Isles for an aggregate price of over $18 million. Respondents purchased securities in reliance on that prospectus. In its next annual report to shareholders, Punta Gorda restated the earnings that had been reported in the prospectus for 1970 and 1971 by writing down its net income for each year by over $1 million. Thereafter, respondents sold their Punta Gorda securities and sustained a loss of $2,650 on their investment.

Respondents filed this action on behalf of themselves and a class of similarly situated purchasers. They alleged that petitioner and other defendants had violated various sections of the Securities Act of 1933 and the Securities Exchange Act of 1934. The District Court first certified, and then, after further proceedings, decertified the class.

Respondents did not request the District Court to certify its order for interlocutory review under 28 U. S. C. § 1292 (b). Rather, they filed a notice of appeal pursuant to § 1291. The Court of Appeals regarded its appellate jurisdiction as depending on whether the decertification order had sounded the “death knell” of the action. After examining the amount of respondents’ claims in relation to their financial resources and the probable cost of the litigation, the court concluded that they would not pursue their claims individually. The Court of Appeals therefore held that it had jurisdiction to hear the appeal and, on the merits, reversed the order decertifying the class. Livesay v. Punta Gorda Isles, Inc., 550 F. 2d 1106.

Federal appellate jurisdiction generally depends on the existence of a decision by the District Court that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Catlin v. United States, 324 U. S. 229, 233. An order refusing to certify, or decertifying, a class does not of its own force terminate the entire litigation because the plaintiff is free to proceed on his individual claim. Such an order is appealable, therefore, only if it comes within an appropriate exception to the final-judgment rule. In this case respondents rely on the “collateral order” exception articulated by this Court in Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, and on the “death knell” doctrine adopted by several Circuits to determine the appealability of orders denying class certification.

I

In Cohen, the District Court refused to order the plaintiff in a stockholder’s derivative action to post the security for costs required by a New Jersey statute. The defendant sought immediate review of the question whether the state statute applied to derivative suits in federal court. This Court noted that the purpose of the finality requirement “is to combine in one review all stages of the proceeding that effectively may be reviewed and corrected if and when final judgment results.” Id., at 546. Because immediate review of the District Court’s order was consistent with this purpose, the Court held it appealable as a “final decision” under § 1291. The ruling had “settled conclusively the corporation’s claim that it was entitled by state law to require the shareholder to post security for costs . . . [and] concerned a collateral matter that could not be reviewed effectively on appeal from the final judgment.”

To come within the “small class” of decisions excepted from the final-judgment rule by Cohen, the order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment. Abney v. United States, 431 U. S. 651, 658; United States v. MacDonald, 435 U. S. 850, 855. An order passing on a request for class certification does not fall in that category. First, such an order is subject to revision in the District Court. Fed. Rule Civ. Proc. 23 (c)(1). Second, the class determination generally involves considerations that are “enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.” Mercantile Nat. Bank v. Langdeau, 371 U. S. 555, 558. Finally, an order denying class certification is subject to effective review after final judgment at the behest of the named plaintiff or intervening class members. United Airlines, Inc. v. McDonald, 432 U. S. 385. For these reasons, as the Courts of Appeals have consistently recognized, the collateral-order doctrine is not applicable to the kind of order involved in this case.

II

Several Circuits, including the Court of Appeals in this case, have held that an order denying class certification is appeal-able if it is likely to sound the “death knell” of the litigation. The “death knell” doctrine assumes that without the incentive of a possible group recovery the individual plaintiff may find it economically imprudent to pursue his lawsuit to a final judgment and then seek appellate review of an adverse class determination. Without questioning this assumption, we hold that orders relating to class certification are not independently appealable under § 1291 prior to judgment.

In addressing the question whether the “death knell” doctrine supports mandatory appellate jurisdiction of orders refusing to certify class actions', the parties have devoted a portion of their argument to the desirability of the small-claim class action. Petitioner’s opposition to the doctrine is based in part on criticism of the class action as a vexatious kind of litigation. Respondents, on the other hand, argue that the class action serves a vital public interest and, therefore, special rules of appellate review are necessary to ensure that district judges are subject to adequate supervision and control.. Such policy arguments, though proper for legislative consideration, are irrelevant to the issue we must decide.

.There are special rules relating to class actions and, to that extent, they are a special kind of litigation. Those rules do not, however, contain any unique provisions governing appeals. The appealability of any order entered in a class action is determined by the same standards that govern ap-pealability in other types of litigation. Thus, if the “death knell” doctrine has merit, it would apply equally to the many interlocutory orders in ordinary litigation — rulings on discovery, on venue, on summary judgment — that may have such tactical economic significance that a defeat is tantamount to a “death knell” for the entire case.

Though a refusal to certify a class is inherently interlocutory, it may induce a plaintiff to abandon his individual claim. On the other hand, the litigation will often survive an adverse class, determination. What effect the economic disincentives created by an interlocutory order may have on the fate of any litigation will depend on a variety of factors. Under the “death knell” doctrine, appealability turns on the court’s perception of that impact in the individual case. Thus, if the court believes that the plaintiff has adequate incentive to continue, the order is considered interlocutory; but if the court concludes that the ruling, as a practical matter, makes further litigation improbable, it is considered an appealable final decision.

The finality requirement in § 1291 evinces a legislative judgment that “ [r] estricting appellate review to 'final decisions’ prevents the debilitating effect on judicial administration caused by piecemeal appeal disposition of what is, in practical consequence, but a single controversy.” Eisen v. Carlisle & Jacquelin, 417 U. S. 156, 170. Although a rigid insistence on technical finality would sometimes conflict with the purposes of the statute, Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, even adherents of the “death knell” doctrine acknowledge that a refusal to certify a class does not fall in that limited category of orders which, though nonfinal, may be appealed without undermining the policies served by the general rule. It is undisputed that allowing an appeal from such an order in the ordinary case would run “directly contrary to the policy of the final judgment rule embodied in 28 U. S. C. § 1291 and the sound reasons for it. . . .” Yet several Courts of Appeals have sought to identify on a case-by-case basis those few interlocutory orders which, when viewed from the standpoint of economic prudence, may induce a plaintiff to abandon the litigation. These orders, then, become appealable as a matter of right.

In administering the “death knell” rule, the courts have used two quite different methods of identifying an appealable class ruling. Some courts have determined their jurisdiction by simply comparing the claims of the named plaintiffs with an arbitrarily selected jurisdictional amount; others have undertaken a thorough study of the possible impact of the class order on the fate of the litigation before determining their jurisdiction. Especially when consideration is given to the consequences of applying these tests to pretrial orders entered in non-class-action litigation, it becomes apparent that neither provides an acceptable basis for the exercise of appellate jurisdiction.

The formulation of an appealability rule that turns on the amount of the plaintiff’s claim is plainly a legislative, not a judicial, function. While Congress could grant an appeal of right to those whose claims fall below a specific amount in controversy, it has not done so. Rather, it has made “finality” the test of appealability. Without a legislative prescription, an amount-in-controversy rule is necessarily an arbitrary measure of finality because it ignores the variables that inform a litigant’s decision to proceed, or not to proceed, in the face of an adverse class ruling. Moreover, if the jurisdictional amount is to be measured by the aggregated claims of the named plaintiffs, appellate jurisdiction may turn on the joinder decisions of counsel rather than the finality of the order.

While slightly less arbitrary, the alternative approach to the “death knell” rule would have a serious debilitating effect on the administration of justice. It requires class-action plaintiffs to build a record in the trial court that contains evidence of those factors deemed relevant to the “death knell” issue and district judges to make appropriate findings. And one Court of Appeals has even required that the factual inquiry be extended to all members of the class because the policy against interlocutory appeals can be easily circumvented by joining “only those whose individual claims would not warrant the 'cost of separate litigation”; to avoid this possibility, the named plaintiff is required to prove that no member of the purported class has a claim that warrants individual litigation.

A threshold inquiry of this kind may, it is true, identify some orders that would truly end the litigation prior to final judgment; allowing an immediate appeal from those orders may enhance the quality of justice afforded a few litigants. But this incremental benefit is outweighed by the impact of such an individualized jurisdictional inquiry on the judicial system’s overall capacity to administer justice.

The potential waste of judicial resources is plain. The district court must take evidence, entertain argument, and make findings; and the court of appeals must review that record and those findings simply to determine whether a discretionary class determination is subject to appellate review. And if the record provides an inadequate basis for this determination, a remand for further factual development may be required. Moreover, even if the court makes a “death knell” finding and reviews the class-designation order on the merits, there is no assurance that the trial process will not again be disrupted by interlocutory review. For even if a ruling that the plaintiff does not adequately represent the class is reversed on appeal, the district court may still refuse to certify the class on the ground that, for example, common questions of law or fact do not predominate. Under the “death knell” theory, plaintiff would again be entitled to an appeal as a matter of right pursuant to § 1291. And since other kinds of interlocutory orders may also create the risk of a premature demise, the potential for multiple appeals in every complex case is apparent and serious.

Perhaps the principal vice of the “death knell” doctrine is that it authorizes indiscriminate interlocutory review of decisions made by the trial judge. The Interlocutory Appeals Act of 1958, 28 U. S. C. § 1292 (b), was enacted to meet the recognized need for prompt review of certain nonfinal orders. However, Congress carefully confined the availability of such review. Nonfinal orders could never be appealed as a matter of right. Moreover, the discretionary power to permit an interlocutory appeal is not, in the first instance, vested in the courts of appeals. A party seeking review of a nonfinal order must first obtain the consent of the trial judge. This screening procedure serves the dual purpose of ensuring that such review will be confined to appropriate cases and avoiding time-consuming jurisdictional determinations in the court of appeals. Finally, even if the district judge certifies the order under § 1292 (b), the appellant still “has the burden of persuading the court of appeals that exceptional circumstances justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.” Fisons, Ltd. v. United States, 458 F. 2d 1241, 1248 (CA7 1972). The appellate court may deny the appeal for any reason, including docket congestion.' By permitting appeals of right from class-designation orders after jurisdictional determinations that turn on questions of fact, the “death knell” doctrine circumvents these restrictions.

Additional considerations reinforce our conclusion that the “death knell” doctrine does not support appellate jurisdiction of prejudgment orders denying class certification. First, the doctrine operates only in favor of plaintiffs even though the class issue — whether to certify, and if so, how large the class should be — will often be of critical importance to defendants as well. Certification of a large class may so increase the defendant’s potential damages liability and litigation costs that he may find it economically prudent to settle and to abandon a meritorious defense. Yet the Courts of Appeals have correctly concluded that orders granting class certification are interlocutory. Whatever similarities or differences there are between plaintiffs and defendants in this context involve questions of policy for Congress. Moreover, allowing appeals of right from nonfinal orders that turn on the facts of a particular case thrusts appellate courts indiscriminately into the trial process and thus defeats one vital purpose of the final-judgment rule- — “that of maintaining the appropriate relationship between the respective courts. . . . This goal, in the absence of most compelling reasons to the contrary, is very much worth preserving.”

Accordingly, we hold that the fact that an interlocutory order may induce a party to abandon his claim before final judgment is not a sufficient reason for considering it a “final decision” within the meaning of § 1291. The judgment of the Court of Appeals is reversed with directions to dismiss the appeal.

It is so ordered.

       “The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States . . . except where a direct review may be had in the Supreme Court.”

       Compare Hackett v. General Host Corp., 455 F. 2d 618 (CA3 1972), cert. denied, 407 U. S. 925; King v. Kansas City Southern Industries, Inc., 479 F. 2d 1259 (CA7 1973) (holding that such an order is not immediately appealable under § 1291), with Hartmann v. Scott, 488 F. 2d 1215 (CA8 1973); Ott v. Speedwriting Pub. Co., 518 F. 2d 1143 (CA6 1975); Eisen v. Carlisle & Jacquelin, 370 F. 2d 119 (CA2 1966), cert. denied, 386 U. S. 1035 (holding that such an order is immediately appealable under §1291).

       The other defendants. Punta Gorda and several of its officers and directors, also filed a petition for writ of certiorari in this Court. Punta Gorda Isles, Inc. v. Livesay, No. 76-1837. After we granted certiorari in this case and No. 76-1837, 434 U. S. 954, the parties entered into a tentative settlement agreement. Respondents and petitioners in No. 76-1837 agreed to dismiss that petition; petitioner in this case, however, did not stipulate to dismissal of its petition. In view of the tentative nature of the settlement, this case is not moot.

       §§11, 12(2) and 17 (b) of the Securities Act of 1933, 15 U. S. C. §§77k, 771(2), and 77q (b) (1976 ed.), and § 10 (b) of the Securities Exchange Act of 1934, 15 U. S. C. § 78j (b) (1976 ed.).

       Section 1292 (b) provides:
      “When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.”

       Respondents also petitioned for a writ of mandamus directing the District Court to recertify the class. Since the Court of Appeals accepted appellate jurisdiction, it dismissed the petition for a writ of mandamus.

       “Plaintiffs, both of whom are employed, have an aggregate yearly gross income of $26,000. Their total net worth is approximately $75,000, but only $4,000 of this sum is in cash. The remainder consists of equity in their home and investments.
      “As of December 1974 plaintiffs had already incurred expenses in excess of $1,200 in connection with this lawsuit. Plaintiffs’ new counsel has estimated expenses of this lawsuit to be $15,000. The nature of this case will require extensive discovery, much of which must take place in Florida, where most defendants reside. Moreover, the allegations regarding the prospectus and financial statements will likely require expert testimony at trial.
      “After considering all the relevant information in the record, we are convinced that plaintiffs have sustained their burden of showing that they will not pursue their individual claim if the decertification order stands. Although plaintiffs’ total net worth could absorb the cost of this litigation, ‘it [takes] no great understanding of the mysteries of high finance to make obvious the futility of spending a thousand dollars to get a thousand dollars — or even less.’ Douglas, Protective Committees in Railroad Reorganizations, 47 Harv. L. Rev. 565, 567 (1934). We conclude we have jurisdiction to hear the appeal.” Livesay v. Punta Gorda Isles, Inc., 550 F. 2d 1106, 1109-1110.

       For a unanimous Court in Cobbledick v. United States, 309 U. S. 323, 325, Mr. Justice Frankfurter wrote:
      “Since the right to a judgment from more than one court is a matter of grace and not a necessary ingredient of justice, Congress from the very beginning has, by forbidding piecemeal disposition on appeal of what for practical purposes is a single controversy, set itself against enfeebling judicial administration. Thereby is avoided the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from its initiation to entry of judgment. To be effective, judicial administration must not be leaden-footed. Its momentum would be arrested by permitting separate reviews of the component elements in a unified cause.”

        Bisen v. Carlisle & Jacquelin, 417 U. S. 166, 171.

       As the Court summarized the rule in Cohen:

      “This decision appears to fall in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” 337 U. S., at 546.

       The Rule provides that an order involving class status may be “altered or amended before the decision on the merits.” Thus, a district court’s order denying or granting class status is inherently tentative.

       “Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative’s claims or defenses, the adequacy of the representative, and the presence of common questions of law or fact are obvious examples. The more complex determinations required in Rule 23 (b) (3) class actions entail even greater entanglement with the merits . . . .” 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §3911, p. 485 n. 45 (1976).

       See, e. g., King v. Kansas City Southern Industries, Inc., 479 F. 2d 1259 (CA7 1973); Williams v. Mumford, 167 U. S. App. D. C. 125, 511 F. 2d 363 (1975), cert. denied, 423 U. S. 828.

       See n. 2, supra.

        E. g., the plaintiff’s resources; the size of his claim and his subjective willingness to finance prosecution of the claim; the probable cost of the litigation and the possibility of joining others who will share that cost; and the prospect of prevailing on the merits and reversing an order denying class certification.

        Korn v. Franchard Corp., 443 F. 2d 1301, 1305 (CA2 1971).

       Thus, orders denying class certification have been held nonappealable because the plaintiffs alleged damages in the $3,000-18,000 range. Shayne v. Madison Square Garden, 491 F. 2d 397 (CA2 1974); Korn v. Franchard Corp., supra; Gosa v. Securities Inv. Co., 449 F. 2d 1330 (CA5 1971); Domaco Venture Capital Fund v. Teltronics Services, Inc., 551 F. 2d 508 (CA2 1977). Smaller claims, however, have been held sufficient to support appellate jurisdiction in other cases. See, e. g., Green v. Wolf Corp., 406 F. 2d 291 (CA2 1968), cert. denied, 395 U. S. 977.

       See n. 15, supra. Thus, it is not at all clear that the prospect of recovering $3,000 would provide more incentive to sustain complex litigation against corporate defendants than the prospect of recovering $1,000. Yet the amount-in-controversy test allows an appeal in the latter ease but not in the former. Compare Green v. Wolf Corp., supra, at 295 n. 6, with Gosa v. Securities Inv. Co., supra. The arbitrariness of this approach is exacerbated by the fact that the Courts of Appeals have not settled on a specific jurisdictional amount; rather, they have simply determined on an ad hoc basis whether the plaintiff’s claim is too small to warrant individual prosecution.

       Cf. Milberg v. Western Pacific R. Co., 443 F. 2d 1301 (CA2 1971).

       See, e. g., Hooley v. Red Carpet Corp., 549 F. 2d 643 (CA9 1977) ; Ott v. Speedwriting Pub. Co., 518 F. 2d 1143 (CA6 1975).

         Hooley v. Red Carpet Corp., supra, at 645.

       See, e. g., Jelfo v. Hickok Mfg. Co., 531 F. 2d 680, 681 (CA2 1976).

       See n. 5, supra.

       Thus, Congress rejected the notion that the courts of appeals should be free to entertain interlocutory appeals whenever, in their discretion, it appeared necessary to avoid unfairness in the particular case. H. R. Rep. No. 1667, 85th Cong., 2d Sess., 4-6 (1958); Note, Interlocutory Appeals in the Federal Courts under 28 U. S. C. § 1292 (b), 88 Harv. L. Rev. 607, 610 (1975).

       H. R. Rep. No. 1667, supra, at 5-6:
      “We also recognize that such savings may be nullified in practice by indulgent extension of the amendment to inappropriate cases or by enforced consideration in Courts of Appeals of many ill-founded applications for review. The problem, therefore, is to provide a procedural screen through which only the desired cases may pass, and to avoid the wastage of a multitude of fruitless applications to invoke the amendment contrary to its purpose. . . .
      "... Requirement that the Trial Court certify the case as appropriate for appeal serves the double purpose of providing the Appellate Court with the best informed opinion that immediate review is of value, and at once protects appellate dockets against a flood of petitions in inappropriate cases. . . . [Ajvoidance of ill-founded applications in the Courts of Appeals for piecemeal review is of particular concern. If the consequence of change is to be crowded appellate dockets as well as any substantial number of unjustified delays in the Trial Court, the benefits to be expected from the amendment may well be outweighed by the lost motion of preparation, consideration, and rejection of unwarranted applications for its benefits.”

       Hearings on H. R. 6238 and H. R. 7260 before Subcommittee No. 3 of the House Committee on the Judiciary, 85th Cong., 2d Sess., 21 (1958).

       Several Courts of Appeals have heard appeals from discretionary class determinations pursuant to § 1292 (b). See, e. g., Lukenas v. Bryce’s Mountain Resort, Inc., 538 F. 2d 594 (CA4 1976); Susman v. Lincoln American Corp., 561 F. 2d 86 (CA7 1977). See also Samuel v. University of Pittsburgh, 506 F. 2d 355 (CA3 1974). As Judge Friendly has noted: “[T]he best solution is to hold that appeals from the grant or denial of class action designation can be taken only under the procedure for interlocutory appeals provided by 28 U. S. C. § 1292 (b). . . . Since the need for review of class action orders turns on the facts of the particular case, this procedure is preferable to- attempts to formulate standards which are necessarily so vague as to give rise to undesirable jurisdictional litigation with concomitant expense and delay.” Parkinson v. April Industries, Inc., 520 F. 2d 650, 660 (CA2 1975) (concurring opinion).

       “The Congress is in a position to weigh the competing interests of the dockets of the trial and appellate courts, to consider the practicability of savings in time and expense, and to give proper weight to the effect on litigants. . . . This Court ... is not authorized to approve or declare judicial modification. It is the responsibility of all courts to see that no unauthorized extension or reduction of jurisdiction, direct or indirect, occurs in the federal system. . . . Any such ad hoc decisions disorganize practice by encouraging attempts to secure or oppose appeals with a consequent waste of time and money. The choices fall in the legislative domain.” Baltimore Contractors v. Bodinger, 348 U. S. 176, 181-182.

        Parkinson v. April Industries, Inc., supra, at 654.

       Respondents also suggest that the Court’s decision in Gillespie v. United States Steel Corp., 379 U. S. 148, supports appealability of a class-designation order as a matter of right. We disagree. In Gillespie, the Court upheld an exercise of appellate jurisdiction of what it considered a marginally final order that disposed of an unsettled issue of national significance because review of that issue unquestionably “implemented the same policy Congress sought to promote in § 1292 (b),” id., at 154, and the arguable finality issue had not been presented to this Court until argument on the merits, thereby ensuring that none of the policies of judicial economy served by the finality requirement would be achieved were the case sent back with the important issue undecided. In this case, in contrast, respondents sought review of an inherently nonfinal order that tentatively resolved a question that turns on the facts of the individual case; and, as noted above, the indiscriminate allowance of appeals from such discretionary orders is plainly inconsistent with the policies promoted by § 1292 (b). If Gillespie were extended beyond the unique facts of that case, § 1291 would be stripped of all significance.


author: ■Mr. Justice Stevens

text:
    GARDNER v. WESTINGHOUSE BROADCASTING CO.
    No. 77-560.
    Argued March 22, 1978
    Decided June 21, 1978
    Stevens, J., delivered the opinion for a unanimous Court.

      Robert N. Hackett argued the cause and filed a brief for petitioner.

      Leonard L. Scheinholtz argued the cause for respondent. With him on the brief were Peter D. Post, Wendell G. Free-land, Richard F. Kronz, and Stuart I. Saltman.

   ■Mr. Justice Stevens

delivered the opinion of the Court.

The United States Court of Appeals for the Third Circuit held that the denial of a class certification could not be appealed immediately under 28 U. S. C. § 1292 (a)(1) as an order refusing an injunction. 559 F. 2d 209. Because there is a conflict among the Circuits on the question whether § 1292 (a)(1) authorizes such an appeal, we granted certiorari. 434 U. S. 984. We affirm.

Petitioner unsuccessfully applied for employment as a radio talk-show host at a station owned by respondent. She then brought this civil rights action on behalf of herself and other Jemales adversely affected by respondent’s alleged practice of discriminating against women. The class she sought to represent included respondent’s past, present, and future female employees; unsuccessful female applicants; females deterred by respondent’s reputation from applying for employment; and females who will not in the future be considered for employment by respondent on account of their sex. Her complaint prayed for equitable relief for the entire class.

Petitioner moved for a class certification pursuant to Fed. Rule Civ. Proc. 23 (b) . The District Court denied the motion on the grounds that petitioner’s claim was not typical and that the case did not present questions of law or fact common to the class. She immediately appealed, invoking the jurisdiction of the Court of Appeals under § 1292 (a)(1).

Petitioner argues that the relief that could be granted in favor of the class if she prevails would be broader than the relief that she may obtain as an individual. The practical effect of the denial of class certification is, therefore, to refuse a substantial portion of the injunctive relief requested in the complaint. Relying on our decision in General Electric Co. v. Marvel Rare Metals Co., 287 U. S. 430, petitioner then argues that this sort of effect on a request for injunctive relief establishes appealability under § 1292 (a)(1). We cannot agree; indeed the argument misconceives both the scope of § 1292 (a)(1) and the import of decisions such as General Electric.

The history of § 1292 (a)(1), which we reviewed in Baltimore Contractors v. Bodinger, 348 U. S. 176, 178-181, need not be repeated. It is sufficient to note that the statute creates an exception from the long-established policy against piecemeal appeals, which this Court is not authorized to enlarge or extend. The exception is a narrow one and is keyed to the “need to permit litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence.” Id., at 181.

The order denying class certification in this case did not have any such “irreparable” effect. It could be reviewed both prior to and after final judgment; it did not affect the merits of petitioner’s own claim; and it did not pass on the legal sufficiency of any claims for injunctive relief. This stands in sharp contrast to the order in General Electric. In that case the Court held that an order dismissing a counterclaim for an injunction was appealable. The order, therefore, entirely disposed of the defendant’s prayer for injunctive relief; here, the order merely limits the scope of the relief that may ultimately be granted. While it may have a significant effect on the litigation, “[m]any interlocutory orders are equally important, . . . but they are not for that reason converted into injunctions.” Morgantown v. Royal Insurance Co., 337 U. S. 254, 258.

As we stated in Switzerland Cheese Assn., Inc. v. E. Horne’s Market, Inc., 385 U. S. 23, 24, “we approach this statute [§ 1292 (a)(1)] somewhat gingerly lest a floodgate be opened that brings into the exception many pretrial orders.” The exception does not embrace orders that have no direct or irreparable impact on the merits of the controversy. The order in this case, like the order in Switzerland Cheese, had no such impact; it “in no way touch[ed] on the merits of the claim but only relate[d] to pretrial procedures . . . .” Id., at 25 A holding that such an order falls within § 1292 (a)(1) would compromise “the integrity of the congressional policy against piecemeal appeals.” 385 U. S., at 25.

The judgment is affirmed.

It is so ordered.

       “§ 1292. Interlocutory decisions.
      “(a) The courts of appeals shall have jurisdiction of appeals from:
      “(1) Interlocutory orders of the district courts of the United States . . . granting, continuing, modifying, refusing or dissolving injunctions,, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court. . . .”

       Compare Williams v. Wallace Silversmiths, Inc., 566 F. 2d 364 (CA2 1977); Williams v. Mumford, 167 U. S. App. D. C. 125, 511 F. 2d 363 (1975), cert. denied, 423 U. S. 828 (holding that such orders are not immediately appealable under § 1292 (a) (1)), with Smith v. Merchants & Farmers Bank, 574 F. 2d 982 (CA8 1978); Jones v. Diamond, 519 F. 2d 1090 (CA5 1975); Price v. Lucky Stores, Inc., 501 F. 2d 1177 (CA9 1974); Yaffe v. Powers, 454 F. 2d 1362 (CA1 1972); Brunson v. Board of Trustees of School District 1, 311 F. 2d 107 (CA4 1962), cert. denied, 373 U. S. 933 (holding that such orders are appealable).

       Petitioner did not file a motion for a preliminary injunction; for that reason, the issue decided in Jenkins v. Blue Cross Mutual Hospital Insurance, Inc., 538 F. 2d 164 (CA7 1976), cert. denied, 429 U. S. 986 (plaintiff’s appeal from denial of class certification and denial of preliminary injunction held within appellate jurisdiction), is not before us.

       On the same day that she filed her motion for class-action certification, petitioner also filed a motion to compel respondent to answer interrogatories concerning its employee rosters at other radio stations, owned and operated by respondent and located in other cities. The District Court did not pass on this second motion because it denied class-action certification.

         Petitioner did not seek certification of her appeal pursuant . to §1292 (b).

       As the Court of Appeals noted, a decision on class-action status “may be conditional, subject to alteration or amendment prior to final judgment, F. R. Civ. P. 23 (c) (1) .... If, after judgment on the merits, the relief granted is deemed unsatisfactory, the question of class status is fully reviewable.” 559 E. 2d 209, 212; see also United Airlines, Inc. v. McDonald, 432 U. S. 385, 393.

         There is an important distinction between an order denying an injunction on the merits and “one based on alleged abuse of a discretionary power over the scope of the action.” Stewart-Warner Corp. v. Westinghouse Electric Corp., 325 F. 2d 822, 829 (CA2 1963) (Friendly, J., dissenting).
      “Where the order is of the former type, the danger of serious harm from the court’s erroneous belief in the' existence of a legal barrier to its entertaining a claim for an injunction has been thought to outweigh the general undesirability of interlocutory appeals. The very fact that the second type of order hinges on the trial court’s discretion is itself an indication that such orders, relating primarily to convenience in litigation, carry a lesser threat of harm.” Ibid.

       In addition to General Electric, petitioner relies on Enelow v. New York Life Insurance Co., 293 U. S. 379, and Ettelson v. Metropolitan Life Insurance Co., 317 U. S. 188. Both of those cases, however, rest on the distinction between “legal” and “equitable” claims and supply no preceden-tial weight for petitioner’s argument. Our characterization of those cases in Morgantown v. Royal Insurance Co., 337 U. S. 254, 258, is equally applicable here:
      “[Distinctions from common-law practice which supported our conclusions in the Enelow and Ettelson cases supply no analogy competent to mate an injunction of what in any ordinary understanding of the word is not one.”

       In Switzerland Cheese we held that an order denying a motion for summary judgment was not within § 1292 (a). Inasmuch as the requested summary judgment would have included an injunction against trademark infringement, that order was, if anything, a more direct refusal of an injunction than the order denying class certification in this case.
      Of course, in one sense, the denial of class certification, like the denial of a summary judgment, does “touch on the merits,” since a court must consider whether the complaint reveals common questions of law and fact, or whether there is a material issue of disputed fact. But this determination does not otherwise reflect on the legal sufficiency of the claim for injunctive relief.