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409 U.S. 891

C. A. 5th Cir. Motion to dispense with printing petition granted. Certiorari denied.

123 T.C. 245

OPINION Thornton, Judge: Respondent determined a $2,376 deficiency in petitioners' 1999 Federal income tax. After concessions, the only issue for decision is whether Social Security disability insurance benefits that Mr. Reimels received in 1999 are excludable from petitioners' income under section 104(a)(4). Background The parties submitted this case fully stipulated pursuant to Rule 122. We incorporate herein the stipulated facts. When petitioners filed their petition, they resided in Hicks-ville, New York. From September 25, 1968, to September 1, 1974, Mr. Reimels served in the U.S. Armed Forces. He was highly decorated for his combat service in Vietnam. While serving there, he was exposed to Agent Orange, an instrumentality of war. After serving in Vietnam, Mr. Reimels was employed in the private sector until February 19, 1993, when he was diagnosed with lung cancer. This illness resulted from his exposure to Agent Orange during his Vietnam combat service. On August 3, 1993, Mr. Reimels applied for disability insurance benefits with the Social Security Administration, claiming disability on account of his lung cancer. On January 13, 1994, the Social Security Administration determined that Mr. Reimels was entitled to disability insurance benefits. On November 2, 1993, Mr. Reimels applied for service-connected disability compensation with the Veterans' Administration. On June 15, 1998, the Veterans' Administration awarded Mr. Reimels a "100 percent service connected disability" on the basis of his exposure to Agent Orange and his diagnosis of lung cancer. In 1999, Mr. Reimels received $12,194 in disability insurance benefits from the Social Security Administration. He also received service-connected disability compensation from the Veterans' Administration, which petitioners allege totaled $2,246 per month. On their 1999 joint Federal income tax return, petitioners excluded from their gross income Mr. Reimels's Social Security disability insurance benefits as well as the disability compensation that he received from the Veterans' Administration. By notice of deficiency, respondent determined that Mr. Reimels's Social Security disability insurance benefits were includable in petitioners' gross income to the extent provided in section 86. Discussion I. Inclusion of Social Security Benefits in Gross Income Before 1983, Social Security benefits were excluded from the recipient's gross income. See, e.g., Rev. Rui. 70-217, 1970-1 C.B. 13. This longstanding practice ended with the enactment of section 86 as part of the Social Security Amendments of 1983, Pub. L. 98-21, sec. 121(a), 97 Stat. 80. The legislative history indicates that Congress made this change to shore up the solvency of the Social Security trust fund and to treat "more nearly equally all forms of retirement and other income that are designed to replace lost wages". S. Rept. 98-23, at 25 (1983), 1983-2 C.B. 326, 328. Section 86 requires the inclusion in gross income of up to 85 percent of Social Security benefits received, including Social Security disability insurance benefits. See, e.g., Joseph v. Commissioner, T.C. Memo. 2003-19; Thomas v. Commissioner, T.C. Memo. 2001-120; Maki v. Commissioner, T.C. Memo. 1996-209. Absent some exception, then, Mr. Reimels's Social Security disability insurance benefits are includable in petitioners' gross income as provided in section 86 and as respondent determined in the notice of deficiency. The question is whether section 104 provides an exception that allows petitioners to exclude Mr. Reimels's Social Security disability insurance benefits from gross income. II. Exclusion From Gross Income Under Section 104 A. The Parties' Contentions Section 104(a) excludes from gross income certain compensation for injuries or sickness. Petitioners rely upon section 104(a)(4), which excludes from gross income "amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the Armed Forces of any country". Petitioners contend that the requirements of section 104(a)(4) are met because the Social Security Administration granted Mr. Reimels's disability insurance benefits solely on the basis of his disability, which resulted from Mr. Reimels's active service in the U.S. Armed Forces. Respondent does not dispute that Mr. Reimels's Social Security disability insurance benefits were "received as a pension, annuity, or similar allowance" within the meaning of section 104(a)(4); consequently, for present purposes we assume that they were. Nor does respondent dispute that Mr. Reimels has suffered personal injuries or sickness resulting from active service in the U.S. Armed Forces. Instead, relying on Haar v. Commissioner, 78 T.C. 864, 866 (1982), affd. 709 F.2d 1206 (8th Cir. 1983), and its progeny, respondent contends that the section 104(a)(4) exclusion is inapplicable because Social Security disability insurance benefits are not paid for personal injury or sickness incurred in military service within the meaning of section 104(a)(4). We are unaware of any court decision specifically addressing the applicability of section 104(a)(4) to Social Security disability insurance benefits. As explained below, the well-established and consistent pattern of decisions in Haar and its progeny compels the conclusion that the Social Security disability insurance payments that Mr. Reimels received in 1999 are not excludable from income under section 104(a)(4). B. Haar v. Commissioner In Haar v. Commissioner, supra, this Court addressed for the first time whether payments made by a nonmilitary employer to a person who retires from service with that employer are excludable from gross income pursuant to section 104(a)(4). In Haar, the taxpayer suffered a hearing loss while serving in the U.S. Air Force. For reasons other than disability, he was discharged from the U.S. Air Force and began working as a civilian employee of the General Services Administration (gsa). He later retired from GSA on account of his hearing disability and began receiving annuity payments from the Civil Service Retirement and Disability Fund. He sought to exclude these payments from his taxable income, relying on section 104(a)(4). In Haar v. Commissioner, supra at 866, we concluded that "Although the ambiguous wording of section 104(a)(4) provides some superficial support" for the taxpayer's position, this circumstance was "overshadowed" by the nature of the Civil Service benefits in question. We noted that the Civil Service Retirement Act, 5 U.S.C. sec. 8331 et seq., is not designed to compensate for military injuries. Rather, in determining eligibility for Civil Service disability benefits, the nature or cause of the disability is irrelevant; the only consideration is the employee's ability to perform his or her job. We concluded: Because disability payments under the Civil Service Retirement Act are not paid for personal injuries or sickness incurred in military service, we conclude that section 104(a)(4) did not entitle petitioner to exclude the disability payments he received in the years in issue. [Id. at 867.] In the 20-plus years since this Court decided Haar, we have consistently followed it in numerous cases addressing whether benefit payments under Civil Service and public employee disability plans were eligible for exclusion under section 104(a)(4). See, e.g., Jeanmarie v. Commissioner, T.C. Memo. 2003-337 (holding that Civil Service Retirement System disability benefits were not excludable); Kiourtsis v. Commissioner, T.C. Memo. 1996-534 (holding that disability retirement income received from New York City Employees' Retirement System was not excludable); French v. Commissioner, T.C. Memo. 1991-417 (holding that Civil Service annuity payments from U.S. Postal Service were not excludable); Grady v. Commissioner, T.C. Memo. 1989-55 (holding that disability pension received from Civil Service Retirement and Disability Fund was not excludable); Tolotti v. Commissioner, T.C. Memo. 1987-13 (holding that Civil Service disability retirement payments from U.S. Office of Personnel Management were not excludable); Lonestar v. Commissioner, T.C. Memo. 1984-80 (holding that civilian service disability pay received from Department of the Navy was not excludable). C. Applicability of Section 104(a)(4) Exclusion to Social Security Disability Insurance Benefits Like the Civil Service and public employee disability benefits considered in Haar v. Commissioner, supra, and its progeny, Social Security disability insurance benefits do not take into consideration the nature or cause of the disability. Social Security disability insurance benefits are provided in title II of the Social Security Act (SSA), 42 U.S.C. secs. 401-434 (2000). Title II provides disability insurance benefits to every individual who is insured for disability insurance benefits, has not attained retirement age, has filed an application for disability insurance benefits, and is under a disability. 42 U.S.C. sec. 423(a)(1); see Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 801 (1999). For purposes of determining eligibility for disability insurance benefits, the Social Security Act gives no consideration to whether the disability arose from service in the Armed Forces or was attributable to combat-related injuries. See 42 U.S.C. sec. 423(d)(1). Insured status for purposes of Social Security disability insurance benefits is determined on the basis of the individual's prior work record and not on the cause of his disability. See, e.g., 42 U.S.C. sec. 423(c); 20 C.F.R. secs. 404.101-404.146 (2003). Moreover, the amount of Social Security disability payments is computed under a formula that does not consider the nature or extent of the injury. Consequently, under the reasoning of Haar v. Commissioner, 78 T.C. 864 (1982), and its progeny, Mr. Reimels's Social Security disability insurance benefits were not paid for personal injuries or sickness resulting from military service within the meaning of section 104(a)(4). Accordingly, these Social Security disability insurance benefits, which are expressly includable in income to the extent provided under section 86, are not eligible for exclusion under section 104(a)(4). D. Petitioners' Argument To Distinguish Haar v. Commissioner Petitioners argue that Haar is distinguishable in that the taxpayer in Haar had been denied disability compensation from the Veterans' Administration, whereas the Veterans' Administration awarded Mr. Reimels a 100-percent service-connected disability. This Court has previously concluded, however, that Haar cannot be fairly distinguished on such grounds. As we stated in Kiourtsis v. Commissioner, supra: Contrary to petitioner's assertions, the key to the holding of Haar and its progeny is not whether the taxpayer received disability compensation from the Veterans' Administration or whether there was a specific finding that the disability was service related. Haar looked to the retirement plan under the Civil Service Retirement Act, and determined that it was "not designed to provide compensation for military injuries." Similarly, as just discussed, disability insurance benefits under the Social Security Act are not designed to provide compensation for military injuries. E. Petitioners' Argument To Overturn Haar Petitioners suggest that Haar was wrongly decided and that we should no longer follow it. Petitioners contend that section 104(a)(4) contains no express requirement that a disability pension be received under a statute designed to compensate for military injuries. They contend that under the literal language of section 104(a)(4) it is sufficient that Mr. Reimels received his Social Security disability insurance benefits on account of a disability resulting from combat-related injuries. In support of their contentions, petitioners rely upon Freeman v. United States, 265 F.2d 66 (9th Cir. 1959), and Prince v. United States, 127 Ct. Cl. 612, 119 F. Supp. 421 (1954). Petitioners' reliance on these cases is misplaced. Freeman and Prince involved military compensation statutes that were designed, at least in part, to compensate for injuries incurred during, or as an incident of, active military service. In each case, the court linked the taxpayer's injuries to that portion of the retirement statute that awarded benefits for service-connected disabilities. The instant case, like Haar and its progeny, and unlike Freeman and Prince, does not involve benefits received under military compensation statutes. Relevant legislative history supports the view that only pensions, annuities, or similar allowances that are received under what are essentially military disability compensation statutes qualify for exclusion under section 104(a)(4). Specifically, in 1976, responding to perceived abuses of the section 104(a)(4) exclusion, Congress acted to severely restrict its availability. As stated in the legislative history to the 1976 amendments of section 104: Military personnel can exclude from income pensions for personal injuries or sickness paid by the Department of Defense (as well as all Veterans Administration disability compensation). The House bill eliminates the exclusion for non-combat related disability pensions for those who joined the armed forces after September 24, 1975, but continues the exemption for V.A. disability compensation or an equivalent amount paid by the Department of Defense. [S. Conf. Rept. 94-1236, at 432 (1976), 1976-3 C.B. (Vol. 3) 807, 836; emphasis added.] As a general principle, provisions granting special tax exemptions are to be strictly and narrowly construed. See Commissioner v. Schleier, 515 U.S. 323, 328 (1995); Helvering v. Northwest Steel Rolling Mills, Inc., 311 U.S. 46, 49 (1940). We believe this general principle has particular cogency in the instant case: as previously discussed, in 1983 Congress reversed prior tax-free treatment of Social Security benefits by mandating that all Social Security benefits, including disability insurance benefits, be at least partially includable in gross income. In making this change, Congress gave no indication that it intended to allow an exception under section 104 or otherwise. Indeed, to allow an exception under section 104 for Social Security disability insurance benefits would appear incongruous with the stated purpose of section 86 to treat "more nearly equally all forms of retirement and other income that are designed to replace lost wages". S. Rept. 98-23, supra at 25-26, 1983-2 C.B. at 328. This Court decided Haar v. Commissioner, 78 T.C. 864 (1982), over 20 years ago. On numerous occasions since, Congress has amended section 104 in various respects. At no time has Congress sought to overturn Haar or to clarify the scope of the section 104(a)(4) exclusion in light of Haar. "[Prolonged congressional silence in response to a settled interpretation of a federal statute provides powerful support for maintaining the status quo. In statutory matters, judicial restraint strongly counsels waiting for Congress to take the initiative in modifying rules on which judges and litigants have relied." Hibbs v. Winn, 542 U.S. _,_, 124 S. Ct. 2276, 2292 (2004) (Stevens, J., concurring); see Commissioner v. Noel's Estate, 380 U.S. 678, 680-681 (1965). This Court's decision in Haar is consistent with the Commissioner's longstanding administrative position in Rev. Rul. 77-318, 1977-2 C.B. 45, that section 104(a)(4) does not apply to a pension, annuity, or similar allowance received on account of active service in a government organization other than the U.S. Armed Forces. This Court' decision in Haar was affirmed by the Court of Appeals for the Eighth Circuit; no court has expressly rejected it. As previously discussed, this Court has consistently followed Haar and has applied its reasoning in many cases. The principle of stare decisis strongly counsels against our now undertaking to reexamine the well-settled pattern of decision that has evolved in this Court and at least one Court of Appeals, consistent with longstanding administrative guidance. Acknowledging that petitioners' position is not without force or appeal, we feel compelled to conclude that any impetus for change should come from the legislature, rather than this Court. For these reasons, and adhering to this Court's reasoning in Haar and its progeny, we conclude that because Mr. Reimels's Social Security disability insurance benefits were not paid as compensation for military injuries or sickness, they are not excludable under section 104(a)(4). F. Petitioners' Alternate Contentions 1. Section 104(b)(2) Petitioners make what appear to be alternate contentions on the basis of the section 104(b)(2) limitations to section 104(a)(4). Essentially, petitioners contend that because Mr. Reimels meets one or several of the requirements in section 104(b)(2), petitioners are entitled to exclude Mr. Reimels's Social Security disability insurance benefits. Congress enacted section 104(b) to curb perceived abuses. Section 104(b)(1) provides that the exclusion under section 104(a)(4) is restricted to the classes of individuals described in section 104(b)(2), as follows: (2) Individuals to whom subsection (a)(4) continues to apply. — An individual is described in this paragraph if— (A) on or before September 24, 1975, he was entitled to receive any amount described in subsection (a)(4), (B) on September 24, 1975, he was a member of any organization (or reserve component thereof) referred to in subsection (a)(4) or under a binding written commitment to become such a member, (C) he receives an amount described in subsection (a)(4) by reason of a combat-related injury, or (D) on application therefor, he would be entitled to receive disability compensation from the Veterans' Administration. For purposes of section 104(b)(2)(C), the term "combat-related injury" means personal injury or sickness which is: (1) Incurred as a direct result of armed conflict, engagement in extra hazardous service, or under conditions simulating war; or (2) caused by an instrumentality of war. Sec. 104(b)(3). Petitioners argue that the Social Security disability insurance benefits Mr. Reimels received in 1999 are excludable under section 104(b)(2)(C) because they are part of a disability pension for his combat-related injury resulting from his exposure to Agent Orange. Petitioners also argue that the Social Security disability insurance benefits are excludable under section 104(b)(2)(D) because Mr. Reimels is entitled to receive disability compensation from the Veterans' Administration. We disagree. Section 104(b)(2) provides no independent basis for exclusion. Instead, consistent with express legislative intent, it limits the classes of persons who otherwise might be eligible for the section 104(a)(4) exclusion. Thus, regardless of whether Mr. Reimels's disability arose from combat-related injuries while he was serving in the U.S. Armed Forces, the payments in question must meet the requirements for exclusion under section 104(a)(4). For the reasons discussed above, Mr. Reimels's Social Security disability insurance benefits do not meet those requirements. 2. Section 104(b)(4) Finally, petitioners rely on section 104(b)(4), which provides that in the case of an individual described in section 104(b)(2) (i.e., an individual who is in one of the classes of persons who remain eligible for the section 104(a)(4) exclusion) the amounts excludable under section 104(a)(4) "shall not be less than the maximum amount which such individual, on application therefor, would be entitled to receive as disability compensation from the Veterans' Administration." On the basis of this provision, petitioners argue that the amount of Social Security disability insurance benefits to be excluded shall not be less than the disability compensation that Mr. Reimels received in 1999 from the Veterans' Administration. Petitioners contend that because the Social Security disability insurance benefits Mr. Reimels received in 1999 were less than his Veterans' Administration disability compensation, they are entitled to exclude the entire amount of Social Security disability insurance benefits received. We disagree for the following reasons. First, subsection (b)(4) of section 104, like just-discussed subsection (b)(2), provides no independent basis for exclusion: for petitioners to be eligible for the claimed exclusion, they must meet the requirements of section 104(a)(4). See Grady v. Commissioner, T.C. Memo. 1989-55. We have held that the Social Security disability insurance benefits in question do not meet those requirements. Second, although section 104(b)(4) is not a model of clarity, its legislative history suggests that it was intended to apply with respect to retired military personnel who do not receive the Veterans' Administration benefits to which they are otherwise entitled. In certain circumstances, section 104(b)(4) provides such persons with a tax benefit at least as great as the tax exemption that would have been available for the forgone Veterans' Administration benefits. Mr. Reimels received his entitlement to full disability benefits from the Veterans' Administration. The parties agree that these benefits are exempt from taxation. There is no indication that Congress intended section 104(b)(4) effectively to provide a second, duplicate tax exclusion with respect to amounts of excludable Veterans' Administration benefits that the taxpayer has actually received. See Kiourtsis v. Commissioner, T.C. Memo. 1996-534. III. Conclusion We hold that the Social Security disability insurance benefits Mr. Reimels received in 1999 are not excludable from gross income under section 104(a)(4). Accordingly, these benefits are includable in gross income to the extent provided in section 86. Decision will be entered under Rule 155. Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the taxable year in issue, and Rule references are to the Tax Court Rules of Practice and Procedure. Agent Orange is an herbicide and defoliant that was used widely in the Vietnam conflict. It contains dioxin and has been shown to possess residual postexposure carcinogenic and teratogenic properties in humans. PDR Medical Dictionary (2d ed. 2000). In the Department of Veterans Affairs Codification Act, Pub. L. 102-83, sec. 301, 105 Stat. 378 (1991), Congress redesignated the Veterans' Administration the Department of Veterans Affairs. For convenience, we refer to the Veterans' Administration, consistent with the language used in sec. 104. Sec. 86(d)(1)(A) defines Social Security benefits to include any amount received by reason of entitlement to a monthly benefit under tit. II of the Social Security Act, 42 U.S.C. secs. 401-434 (2000); i.e., amounts received as disability insurance benefits. Sec. 86(f) specifies that "any social security benefit shall be treated as an amount received as a pension or-annuity" for purposes of certain specified Code sections, not including sec. 104. In Haar v. Commissioner, 78 T.C. 864 (1982), affd. 709 F.2d 1206 (8th Cir. 1983), the taxpayer also applied for disability compensation from the Veterans' Administration. Although the Veterans' Administration determined that the taxpayer had defective hearing that was service connected, it concluded that the taxpayer's injury was not disabling to a compensable degree. Social Security disability insurance is contributory and is designed to prevent public dependency by protecting workers and their families against common economic hazards. Mathews v. de Castro, 429 U.S. 181, 185-186 (1976). Its primary objective is to provide workers and their families with basic protection against hardships created by loss of earnings due to illness or old age; the disability insurance provisions are not general public assistance laws and are not need based. Id.; see also Sciarotta v. Bowen, 735 F. Supp. 148, 151 (D.N.J. 1989). Eligibility for Social Security disability insurance benefits is conditioned on the existence of a "disability", which is defined as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months". 42 U.S.C. sec. 423(d)(1). For this purpose, the beneficiary's impairment must be: of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. [42 U.S.C. sec. 423(d)(2)(A).] The monthly Social Security disability insurance benefit is equal to the "primary insurance amount". 42 U.S.C. sec. 423(a)(2); 20 C.F.R. secs. 404.201(a), 404.317 (2003). The primary insurance amount is computed primarily under one of two major methods, the average-indexed-monthly-eamings method or the average-monthly-wages method, both of which are based on the beneficiary's earnings record. See 20 C.F.R. secs. 404.204, 404.210-404.212, 404.220-404.222 (2003). One example of a disability compensation statute that is designed, at least in part, to compensate individuals for military injuries is 10 U.S.C. sec. 1201 (2000). Under this provision, military disability retirement pay is available for, among other things, a disability that is the proximate result of performing active duty, a disability that was incurred in the line of duty in time of war or national emergency, or a disability that was incurred in the line of duty after Sept. 14, 1978. See Victims of Terrorism Tax Relief Act of 2001, Pub. L. 107-134, sec. 113(a), 115 Stat. 2435 (2002) (amending sec. 104(a)(5) as relates to terrorist attacks); Taxpayer Relief Act of 1997, Pub. L. 105-34, sec. 1529, 111 Stat. 1075 (creating personal injury presumption for heart disease and hypertension of former police officers and firefighters for purposes of sec. 104(a)(1)) (amended by Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 6015(c)(1), 112 Stat. 821); Small Business Job Protection Act of 1996, Pub. L. 104^188, sec. 1605(a), 110 Stat. 1838 (restricting sec. 104(a)(2) to personal physical injuries and sickness); Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, sec. 7641(a), 103 Stat. 2379 (making sec. 104(a)(2) inapplicable with respect to punitive damages in connection with a case not involving physical injury or physical sickness); Act of Jan. 14, 1983, Pub. L. 97-473, sec. 101(a), 96 Stat. 2605 (amending sec. 104(a)(2) with respect to amounts received by suit or agreement). Rev. Rul. 77-318, 1977-2 C.B. 45, holds that an individual may not exclude from gross income Civil Service payments received for a disability retirement occasioned by injuries sustained during active military service. The relevant legislative history explains the reasons for the 1976 amendments as follows: In many cases, armed forces personnel have been classified as disabled for military service shortly before they would have become eligible for retirement principally to obtain the benefits of the special tax exclusion on the disability portion of their retirement pay. In most of these cases the individuals, having retired from the military, earn income from other employment while receiving tax-free "disability" payments from the military. [H. Rept. 94-658, at 152 (1975), 1976-3 C.B. (Vol. 2) 695, 844.] Sec. 104(b)(3) also provides that "In the case of an individual who is not described in sub-paragraph (A) or (B) of paragraph (2), except as provided in paragraph (4), the only amounts taken into account under subsection (a)(4) shall be the amounts which he receives by reason of a combat-related injury." Moreover, as previously discussed, the fact that Mr. Reimels received disability compensation from the Veterans' Administration does not distinguish Haar v. Commissioner, 78 T.C. 864 (1982), and does not entitle Mr. Reimels to an exclusion under sec. 104(a)(4). See Kiourtsis v. Commissioner, T.C. Memo. 1996-534. The Veterans' Administration provides compensation for service-connected disability. See 38 U.S.C. sec.1110 (2000) (providing compensation for disability resulting from personal injury suffered or disease contracted in line of duty, or for aggravation of a preexisting injury suffered or disease contracted in line of duty, in the active military, naval, or air service, during a period of war); id. sec. 1131 (providing compensation for disability resulting from personal injury suffered or disease contracted in line of duty, or for aggravation of a preexisting injury suffered or disease contracted in line of duty, in the active military, naval, or air service, during other than a period of war); see also Sidoran v. Commissioner, 640 F.2d 231, 233 (9th Cir. 1981) ("The Veterans' Administration's disability benefits program is intended to compensate a veteran for impairment resulting from service-connected injuries."), affg. T.C. Memo. 1979-56. In general, monthly compensation for service-connected disability is paid on the basis of a rating of the claimant's disability, which is in turn based on a schedule of ratings of reductions in earning capacity from specific injuries or combination of injuries. See, e.g., 38 U.S.C. secs. 1114, 1134, 1155 (2000); 38 C.F.R. secs. 4.1-4.150 (2003). Payments of Veterans' Administration benefits are tax exempt. 38 U.S.C. sec. 5301 (2000); Porter v. Aetna Cas. & Sur. Co., 370 U.S. 159, 160 (1962) ("Since 1873, it has been the policy of the Congress to exempt veterans' benefits from creditor actions as well as from taxation."). The legislative history to sec. 104(b)(4) states: At all times, Veterans' Administration disability payments will continue to be excluded from gross income. In addition, even if a future serviceman who retires does not receive his disability benefits from the Veterans' Administration, he will still be allowed to exclude from his gross income an amount equal to the benefits he could receive from the Veterans' Administration. Otherwise, future members of the armed forces will be allowed to exclude military disability retirement payments from their gross income only if the payments are directly related to "combat injuries." [S. Rept. 94^938, at 139 (1976), 1976-3 C.B. (Vol. 3) 49, 177.] In other words, a retired serviceman ordinarily would be unable to exclude benefit payments received for a non-combat-related injury. See sec. 104(b)(2)(C) and (3). If such benefit payments otherwise meet the requirements of sec. 104(a)(4), however, sec. 104(b)(4) would allow the serviceman to exclude at least as much of the payments as equals any Veterans' Administration benefits which the serviceman would have been entitled to, but did not, receive.

474 U.S. 947

C. A. 3d Cir. Certiorari denied.

489 U.S. 1016

C. A. 1st Cir. Certiorari denied.

321 U.S. App. D.C. 300

SILBERMAN, Circuit Judge: Tyrone Walker was convicted of possession of over five grams of cocaine base with the intent to distribute. His appeal focuses on his challenge to the sufficiency of the evidence to support the conviction and the trial judge's aiding and abetting instruction. We affirm. I. When District of Columbia police arrived at 1123 First Terrace to execute a search warrant, they discovered crack cocaine, marijuana, weapons, and drug paraphernalia spread throughout the third floor of the house. The largest concentration was found in one of the bedrooms (bedroom three). The police there found $2,621 in cash and plastic bags filled with $1,760 worth of crack, all nestled under the mattress of a waterbed. On the closet shelf sat a Sucrets box containing marijuana stems and seeds, a blackjack, and empty ziplock bags. A small hand scale and an array of empty bags littered the bedroom floor. Officer Derek Bell questioned appellant, who gave his name and referred to bedroom three as his bedroom. The officers found appellant in one of the other bedrooms (bedroom one), along with Donnell Reed and Reed's girlfriend. Live ammunition, $870 in cash, plastic bags, and an electronic scale — all in plain view — were scattered around appellant. Reed told police that he lived in the house and admitted that the items in that room belonged to him. On the floor of a neighboring bedroom (bedroom two), in which five additional people were present, police recovered loose rocks of crack cocaine and ziplock bags containing both marijuana and rocks of cocaine. In the third floor bathroom, police found 61 ziplock bags filled with cocaine, with a retail value of $1,220, floating in the toilet and four more strewn about the floor near the bathtub. Walker's defense rested on his contention that he was merely an innocent occupant of the house, with no responsibility for, or any knowledge of, the incriminating items found inside his bedroom — a room he confessed was his when he stayed over at the house, but that he claimed other individuals used, including some of the individuals found in bedroom two. Walker admitted general knowledge of the drug activities in the house, but he pointed to the individuals found in bedroom two as the perpetrators. The government pursued two alternative theories upon which the jury could convict Walker under 21 U.S.C. § 841 (1994). It was claimed that Walker resided in bedroom three, and consequently exercised dominion and control over the drugs and paraphernalia — obviously intended for distribution — in that room'. Alternatively, the government posited that appellant was guilty under the same provision, § 841, as Reed's aider and abettor. See 18 U.S.C. § 2 (1994). The jury received instructions on both the principal and aider and abettor theories of liability. The jury rejected Walker's defense and convicted him without specifying which of the government's two theories of liability supported its verdict. II. Appellant first claims that there was insufficient evidence to support his conviction for possession with intent to distribute. We apply the familiar deferential standard of review under which we determine "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). In so doing, we permit the government "the benefit of all reasonable inferences that may be drawn from the evidence." United States v. Sutton, 801 F.2d 1346, 1358 (D.C.Cir.1986). It is undisputed that Walker "resided" in bedroom three. But appellant points out that it is also undisputed that at least four others used that room and that the drug paraphernalia found in that room was not in plain view so there was no reason for the jury to infer that he knew about the drugs, let alone possessed them with the intent to distribute. He relies particularly on two of our prior cases, United States v. Thorne, 997 F.2d 1504 (D.C.Cir.), cert. denied, 510 U.S. 999, 114 S.Ct. 568, 126 L.Ed.2d 467 (1993) and United States v. Watkins, 519 F.2d 294 (D.C.Cir.1975). In Thorne, we held that evidence that a defendant shared a bedroom with four others including his brother where drugs and drug paraphernalia were found in a closet was insufficient to support an inference that the defendant possessed the drugs. We emphasized that the drugs were not in plain view so there was no reason to conclude that the defendant knew about them. See 997 F.2d at 1510. We also noted, moreover, that a ledger of drug transactions found in the house containing the names of the other occupants of the house did not include the defendant's. In Watkins, we reversed a conviction where the entirety of the government's evidence consisted of some books containing Watkins' name, which the police found in a closet, and Watkins' presence in the room in which police found the concealed drugs. See Watkins, 519 F.2d at 298. We think our case is distinguishable in several critical respects. First, appellant was found in bedroom one (Reed's room), surrounded by drug paraphernalia in the open. Drugs were found all over the floor of another bedroom and in the bathroom. Appellant could not claim, as did the defendants in Thome and Watkins, that he was innocent of any knowledge of drugs and drug paraphernalia possession in the house. Second, the evidence here was sufficient for the jury to conclude that appellant was the primary occupant of bedroom three. Appellant himself told jurors of his admission to .the police that he lived at 1123 First Terrace. Officer Bell testified that Walker referred to bedroom three specifically as his room, and Walker's mother told jurors that bedroom three belonged to Walker. Officers found identification for appellant, including a photo I.D., on top of the television set in bedroom three, a poster-size photo of appellant adorning the wall, and a shoe box holding Walker's personal papers (including a District of Columbia non-driver identification card) in the room. Appellant's name is even listed on the lease as one of the residents. Once a jury reaches the conclusion that Walker was the primary occupant of bedroom three the fact that the drugs and drug paraphernalia are stored away in the room does not tend to exculpate him. For it would be rather illogical for a user of the room to leave any material in the bedroom of the primary occupant under the assumption that such material would remain undetected by the primary occupant — at least absent a showing that the material was hidden in places not normally utilized. We therefore are confident that the evidence is sufficient as to the possession with intent to distribute charge. But appellant contends that we must also independently evaluate the sufficiency of the aider and abettor evidence. It is not at all clear, to be sure, exactly which evidence the government relies on to make out the charge of appellant's aiding and abetting Reed's possession. Appellant argues that the government may not claim that aiding and abetting is merely a subset of appellant's possession. See United States v. White, 1 F.3d 13, 16-17 (D.C.Cir.1993) (suggesting that aiding and abetting passport fraud requires additional elements of proof than passport fraud), cert. denied, 510 U.S. 1111, 114 S.Ct. 1053, 127 L.Ed.2d 374 (1994). However, we need not decide which evidence, if any, supports the aiding and abetting theory, because the Supreme Court has recently determined in Griffin v. United States, 502 U.S. 46, 56-57, 112 S.Ct. 466, 472-73, 116 L.Ed.2d 371 (1991), that when a defendant is convicted of a crime based on alternative theories, and there is sufficient evidence to convict on one, it is unnecessary for a reviewing court to consider whether the evidence is sufficient on the alternative ground. Still, Griffin left intact, if somewhat battered, the Court's earlier decision in Yates v. United States, 354 U.S. 298, 311-12, 77 S.Ct. 1064, 1073, 1 L.Ed.2d 1356 (1957), which held that an independent legal error associated with one of two alternative theories is treated differently than an insufficiency of the evidence claim. In that regard, appellant argues that the trial judge's instruction to the jury was such an error because he, in effect, removed the element of intent from the crime of aiding and abetting. This sort of error, moreover, could not be regarded as harmless. See United States v. Jones, 909 F.2d 533, 538 (D.C.Cir.1990). At one point in his instruction to the jurors, the judge informed them that: It is not necessary that the defendant have had the same intent that the principal offender had when the crime was committed or that he have intended to commit the particular crime committed by the principal offender. (Emphases added). Appellant rightly tells us that the trial court's statement is at odds with language in some of our cases, in which we have stated that an aider and abettor must have the "same intent" as a principal. See United States v. Salamanca, 990 F.2d 629, 638 (D.C.Cir.), cert. denied, 510 U.S. 928, 114 S.Ct. 337, 126 L.Ed.2d 281 (1993); United States v. North, 910 F.2d 843, 881 n. 11 (D.C.Cir.1990), cert. denied, 500 U.S. 941, 111 S.Ct. 2235, 114 L.Ed.2d 477 (1991). The government's brief, although decidedly uncomfortable with and even critical of the footnote in North and our language in Salamanca, does not clearly indicate why appellant's reliance of those eases is misplaced. That seems to be because the government reads North and Salamanca's use of the phrase "same intent" as requiring an intent which is "matched" — which would mean that an aider and abettor must have exactly the same knowledge and disposition as the principal. But that is an overreading; no court has ever so held, as it virtually would eliminate aider and abettor liability. Appellant, ironically, has it right when, in defense of our "same intent" language, he points to eases that have instead used the term shared intent, see, e.g., Nye & Nissen v. United States, 336 U.S. 613, 620, 69 S.Ct. 766, 770, 93 L.Ed. 919 (1949); United States v. Martiarena, 955 F.2d 363, 366 (5th Cir. 1992); see also United States v. Garrett, 720 F.2d 705, 713 (D.C.Cir.1983), cert. denied, 465 U.S. 1037, 104 S.Ct. 1311, 79 L.Ed.2d 708 (1984); United States v. Raper, 676 F.2d 841, 850-51 & n. 1 (D.C.Cir.1982), which suggests that the intent of the aider and abettor must be shown, in crucial respects, to overlap with (but not necessarily match) the criminal intent of the principal. For example, in United States v. Edmond, 924 F.2d 261, 267 (D.C.Cir.), cert. denied, 502 U.S. 838, 112 S.Ct. 125, 116 L.Ed.2d 92 (1991), we noted that if a jury thought an aider and abettor had premeditated a murder, but enlisted an executioner at the last possible moment, a jury "could consistently convict the abettor of first-degree murder while finding the actual perpetrator guilty only of [second-degree murder]." The North case footnote upon which Salamanca relied, although it used the cryptic and somewhat ambiguous phrase "same intent," must be read as meaning no more than the traditional notion of shared intent because the note explicitly relied on United States v. Sampol, 636 F.2d 621, 676 (D.C.Cir.1980), and it did not purport to alter the principles we applied there. In Sampol, we had explained that an aider and abettor and a principal must have a "common design or plan," but the aider and abettor "need not perform the substantive offense, need not know its details, and need not even be present." Id. (internal quotation marks and citations omitted). And we explicitly recognized that once a common design is established, the aider and abettor is responsible not only for the success of the common design, but also for the probable and natural consequences that flow from its execution, even if those consequences were not originally intended. See id. When the district judge told the jury that they need not find that appellant had the "same intent" as Reed, we think, after examining his whole instruction, he was indicating only that the jury need not find a perfectly matched knowledge and intent. The trial judge began by telling jurors that an aider and abettor must "intentionally participate[ ] in the commission of a crime" and that they "must find that the defendant knowingly associated himself with the person who committed the crime, that he participated in the crime as something he wished to bring about, and that he intended by his action to make it succeed." The trial judge also told them that "some affirmative conduct by the defendant-to help in planning and carrying out the crime is necessary." Read in their entirety, then, the instructions did not remove the intent requirement from the jury's purview, as appellant asserts, but instead gave the jury adequate guidance on the requisite intent for aiding and abetting. Even if we concede, as we must, that "same intent" is imprecise and ambiguous, the surrounding language clarified the ambiguity. See United States v. Childress, 58 F.3d 693, 709 (D.C.Cir.1995), cert. denied, — U.S. -, 116 S.Ct. 825, 133 L.Ed.2d 768 (1996). * Appellant's remaining arguments are of little moment. Appellant claims the trial judge abused his discretion in refusing to grant a mistrial after the government elicited allegedly improper hearsay. Officer Bell repeated a statement from Annette Reed, appellant's mother, to justify his decision not to arrest her that night. The trial judge struck the statement from the record and instructed the jury to disregard it. The next morning, the judge again reminded jurors not to consider the testimony. We have no cause to doubt that the jury followed the court's curative instructions, therefore we do not believe the trial judge abused his discretion in denying the motion for a mistrial. See United States v. Burroughs, 935 F.2d 292, 295 (D.C.Cir.1991). Appellant also contends that the trial judge should have declared a mistrial or held a post-trial hearing after discovering that a juror failed to disclose information at voir dire. Appellant scrutinizes the response of the jury foreman, who denied having "been accused" of a crime other than a traffic offense during the past 10 years. The foreman was charged with a misdemeanor 10 years and six months prior to responding to the question, but was not acquitted until nine years and nine months before voir dire. Because of the phrasing of the question, we doubt the juror's answer was improper at all, let alone sufficiently defective for appellant to clear the heightened thresholds of review we apply to the district court's denial of the request for a new trial, see McDonough Power Equipment, Inc. v. Greenwood, 464 U.S. 548, 555-56, 104 S.Ct. 845, 849-50, 78 L.Ed.2d 663 (1984); North, 910 F.2d at 904, and the denial of the request for a post-trial hearing, see United States v. Boney, 977 F.2d 624, 634 (D.C.Cir.1992). Accordingly, appellant's conviction is therefore Affirmed. . Similarly, in Salamanca, although the opinion cites to the "same criminal intent" language from North, the court found insufficient evidence against Salamanca because he did not assist in the offense until after it was committed. The court noted that he was more likely an accessory after the fact, see Salamanca, 990 F.2d at 640, rather than an aider and abettor. . The latter clause in the judge's charge — "[the government need not show] that he have intended to commit the particular crime committed by the principal offender" — might be thought more troubling than the "same intent" language that appellant focuses on, but we think that the jury would likely focus on the judge's reference to the particular criminal act. That is, we think the jury would recognize the judge's effort to focus them on the fact that an aider and abettor "need not know [the substantive offense's] details," Sampol, 636 F.2d at 676 (citation omitted). Indeed, the very next sentence in the instruction told jurors that "[a]n aider and abettor is legally responsible for the acts of other persons that are the natural and probable consequences of the crime in which he intentionally participates." . Specifically, Officer Bell told jurors that Ms. Reed "explained to me that she had no knowledge that her sons were doing drugs upstairs." The government argues that Ms. Reed's statement affected Bell's state of mind and was introduced solely to show its effect on him — not to prove its veracity — because whether it was true or false, it affected Officer Bell's beliefs. Used in that manner, contends the government, the statement did not constitute hearsay. This argument may well merit additional attention in the absence of a limiting instruction, but we believe the instruction stripped the statement of any prejudicial impact, regardless of its intended use at trial.

469 U.S. 852

Ct. App. Ohio, Fairfield County. Certiorari denied.

27 T.C. 507

OPINION. Withet, Judge: Petitioner's claims for relief are based on section 722 (b) (4), Internal Revenue Code of 1939. It contends that there was a change in the character of its business during the base period years when it began the manufacture and sale of portable rotary drilling rigs and telescoping derricks. Respondent has recognized that petitioner is entitled to have its excess profits tax computed on a constructive average base period net income of $8,700, which produces a credit slightly in excess of that computed under the invested capital method for 1941 but less than that for the other taxable years. Respondent stated in his notice of deficiency and partial allowances of petitioner's claims, dated May 10, 1951, as follows: After careful consideration of your applications for relief under section 722 of the Internal Revenue Code filed April 2, 1943 for the taxable years ended December 31,1940 and December 31,1941, June 7,1943 for the taxable year ended December 31, 1942, May IS, 1944 for the taxable year ended December 31, 1943, and June 25, 1946, for the taxable years ended December 31, 1944 and December 31, 1945, it has been determined that, except with respect to the taxable year ended December 31, 1941, you have not established your right to the relief requested. The relief requested for the taxable year ended December 31, 1941, has been allowed in part. * It has been determined that your invested capital credit as computed under section 714 of the Internal Revenue Code is an inadequate standard for determining excess profits tax for the taxable year ended December 31, 1941 but not for the taxable year ended December 31, 1940 and the taxable years ended December 31, 1942 to December 31, 1945, inclusive. Although a constructive average base period net income of $8,700.00 would be allowable for the taxable years ended December 31, 1942 to December 31, 1945, inclusive, the amount would not result in tax benefits greater than those obtained under the provisions of section 714 of the Internal Revenue Code. It has been concluded that you were entitled to a constructive average base period net income of $8,700.00 for the taxable year ended December 31, 1941. However, in accordance with your request, an excess profits credit of $7,965.10 an amount determined under the provisions of section 714 of the Internal Revenue Code, was used in computing your excess profits tax liability for the taxable year ended December 31, 1941 as set forth in this statement. In the opening statements of counsel at the trial of the case, petitioner's counsel asked Government counsel "for the sake of the record, do you view the case as though we were dealing with the reconstruction problem only?", and Government counsel replied, "Yes, primarily." The record does not show on what specific grounds respondent determined that petitioner was entitled to the use of a constructive average base period net income of $8,700 in computing its excess profits credit. In his brief, respondent points out that in the statutory notice to petitioner he has admitted a "qualifying change," but argues that petitioner has failed to demonstrate that it is entitled to a constructive average base period net income in excess of that which has been allowed. On these facts, and the further facts found above regarding petitioner's base period operations, we hold that petitioner changed the character of its business during the base period when it began the manufacture and sale of integrated, portable drilling rigs and telescoping derricks and is, therefore, entitled to have its excess profits credit for each of the taxable years computed on a fair and just amount representing normal earnings under the changed conditions. We do not think that there was any change in the character of petitioner's business resulting from petitioner's entering into foreign trade. The large Russian order, which petitioner obtained early in 1940, according to petitioner's own statement, was in pursuance of a change in its sales policy; but all the record shows petitioner would have accepted foreign orders at any time. As a reconstruction problem, our question is: What would have been petitioner's average base period earnings if it had commenced the manufacture and sale of rotary drilling rigs and telescoping derricks 2 years earlier than it did ? To gain any relief, petitioner must establish a constructive average base period net income that would result in excess profits credit, computed under the income credit method, in excess of the credit which has been allowed under the invested capital method. Green Spring Dairy, Inc., 18 T. C. 217; Godfrey Food Co., 18 T. C. 1083. Petitioner first began the manufacture and sale of portable rotary drilling units for production purposes in 1937. These were small units to be used for drilling slim holes to a depth of not more than 4,000 feet. They were made to specifications of the purchasers and were mounted on trucks. Petitioner received orders for 4 such rigs in 1937 from 3 different large oil producers at prices from approximately $9,000 to $20,000. Three of these units were sold in 1937 for a total sales price of $40,597.51; 6 in 1938 for $169,761.58; and 4 in 1939 for $116,054.36. By the end of 1939 petitioner had developed a large portable unit capable of drilling to a^depth of 6,000 feet. It had eliminated many of the defects in the early models which had developed with actual field use and had standardized most of the parts of the different models. Also, in 1939, petitioner had developed and put on the market a telescoping derrick for use in servicing producing wells. This type of derrick had several important advantages over the telescoping mast servicing units which petitioner had previously produced. In our opinion, the evidence of record supports petitioner's contention that it would have reached a higher earning level by the end of 1939 if it had begun the manufacture and sale of the complete portable drilling rigs and telescoping derricks 2 years earlier than it did. This would have given petitioner more needed time to work out the defects which developed in actual field use of the new equipment and to promote its acceptance by the oil producers. The evidence convinces us that with 2 years' additional experience petitioner would not only have sold more units of each type but would also have been able to reduce the per unit cost, after elimination of the development expenses. The extent to which these earlier changes would have improved petitioner's base period earnings is necessarily a matter of speculation. In its proposed reconstruction petitioner estimates that with the earlier changes it would have been able to sell in 1939 at least 30 of the portable rotary drilling units and 12 telescoping derrick units. The sales prices and production costs per unit are geared to petitioner's actual 1939 experience, adjusted for various business period indices and price fluctuations. The sales of products other than portable drilling rigs, such as well servicing units, spudders, and core drills, are not reconstructed, but spare parts and service sales are increased to 20 per cent of the reconstructed unit sales of drills and derricks, which is somewhat less than petitioner's base period experience. The final result of petitioner's reconstruction is a constructive average base period net-income of $248,853.68 for 1940, and $298,710.52 for the years 1941 to 1945, inclusive. The estimates of the number of units that petitioner could have sold in 1939 with the changes having been made 2 years earlier than they were is supported by the testimony of several of petitioner's witnesses. Although we do not question the sincerity and impartiality of these witnesses, we nevertheless are unable to accept their estimates as a basis for a reconstruction of petitioner's base period earnings. There were adverse factors affecting petitioner's business in 1939, such as depressed economic conditions and restricted oil production, which may have been obscured by the passing of time. We think that the views of these witnesses reflect too much of the optimism bom of later more prosperous years. But even if petitioner had been able to obtain orders for as many portable rotary drilling units and telescoping derricks in 1939 as claimed, there is no showing that it had the plant capacity to produce them. Petitioner represented to the Commissioner in its claim for relief under section 721, in connection with its Russian order for drilling rigs, that it was required to double its plant capacity in order to produce the 40 units contracted for early in 1940. Obviously, without a large expansion of its plant petitioner would not have had the capacity to produce 30 rotary drilling rigs and 12 telescoping derricks in 1939. And if petitioner had expanded its plant in the base period to handle the larger volume of business, production costs would likely Jiave been much greater and net profits per unit smaller. The evidence as a whole, we think, falls far short of supporting petitioner's constructive average base period net income figure of $248,853.68 for 1940 and $298,710.52 for the other excess profits tax years, as against petitioner's actual average base period net loss of over $5,000. On the other hand, we think that the constructive average base period net income of $8,700, which the respondent has determined, is entirely inadequate to place petitioner's base period operations under the changed conditions on a normal basis. There is nothing in the record to show how respondent arrived at that amount or even what factors he took into account in making his determination. From our careful study of the evidence and our best appraisal of the arguments offered by the parties in their briefs, we have concluded that a fair and just amount representing normal earnings to be used as a constructive average base period net income is $30,000. This amount should be properly adjusted for income tax as to the year 1940. Reviewed by the Special Division. Decision will be entered u/nder Bule 50.

572 U.S. 93

Chief Justice ROBERTS delivered the opinion of the Court. In the mid-19th century, Congress began granting private railroad companies rights of way over public lands to encourage the settlement and development of the West. Many of those same public lands were later conveyed by the Government to homesteaders and other settlers, with the lands continuing to be subject to the railroads' rights of way. The settlers and their successors remained, but many of the railroads did not. This case presents the question of what happens to a railroad's right of way granted under a particular statute-the General Railroad Right-of-Way Act of 1875-when the railroad abandons it: does it go to the Government, or to the private party who acquired the land underlying the right of way? I A In the early to mid-19th century, America looked west. The period from the Louisiana Purchase in 1803 to the Gadsden Purchase in 1853 saw the acquisition of the western lands that filled out what is now the contiguous United States. The young country had numerous reasons to encourage settlement and development of this vast new expanse. What it needed was a fast and reliable way to transport people and property to those frontier lands. New technology provided the answer: the railroad. The Civil War spurred the effort to develop a transcontinental railroad, as the Federal Government saw the need to protect its citizens and secure its possessions in the West. Leo Sheep Co. v. United States, 440 U.S. 668, 674-676, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979). The construction of such a railroad would "furnish a cheap and expeditious mode for the transportation of troops and supplies," help develop " the agricultural and mineral resources of this territory," and foster settlement. United States v. Union Pacific R. Co., 91 U.S. 72, 80, 23 L.Ed. 224 (1875). The substantial benefits a transcontinental railroad could bring were clear, but building it was no simple matter. The risks were great and the costs were staggering. Popular sentiment grew for the Government to play a role in supporting the massive project. Indeed, in 1860, President Lincoln's winning platform proclaimed: "That a railroad to the Pacific Ocean is imperatively demanded by the interests of the whole country; that the Federal Government ought to render immediate and efficient aid in its construction." J. Ely, Railroads and American Law 51 (2001). But how to do it? Sufficient funds were not at hand (especially with a Civil War to fight), and there were serious reservations about the legal authority for direct financing. "The policy of the country, to say nothing of the supposed want of constitutional power, stood in the way of the United States taking the work into its own hands." Union Pacific R. Co., supra, at 81. What the country did have, however, was land-lots of it. It could give away vast swaths of public land-which at the time possessed little value without reliable transportation-in hopes that such grants would increase the appeal of a transcontinental railroad to private investors. Ely, supra, at 52-53. In the early 1860s, Congress began granting to railroad companies rights of way through the public domain, accompanied by outright grants of land along those rights of way. P. Gates, History of Public Land Law Development 362-368 (1968). The land was conveyed in checkerboard blocks. For example, under the Union Pacific Act of 1862, odd-numbered lots of one square mile apiece were granted to the railroad, while even-numbered lots were retained by the United States. Leo Sheep Co., supra, at 672-673, 686, n. 23, 99 S.Ct. 1403. Railroads could then either develop their lots or sell them, to finance construction of rail lines and encourage the settlement of future customers. Indeed, railroads became the largest secondary dispenser of public lands, after the States. Gates, supra, at 379. But public resentment against such generous land grants to railroads began to grow in the late 1860s. Western settlers, initially some of the staunchest supporters of governmental railroad subsidization, complained that the railroads moved too slowly in placing their lands on the market and into the hands of farmers and settlers. Citizens and Members of Congress argued that the grants conflicted with the goal of the Homestead Act of 1862 to encourage individual citizens to settle and develop the frontier lands. By the 1870s, legislators across the political spectrum had embraced a policy of reserving public lands for settlers rather than granting them to railroads. Id., at 380, 454-456. A House resolution adopted in 1872 summed up the change in national policy, stating: "That in the judgment of this House the policy of granting subsidies in public lands to railroads and other corporations ought to be discontinued, and that every consideration of public policy and equal justice to the whole people requires that the public lands should be held for the purpose of securing homesteads to actual settlers, and for educational purposes, as may be provided by law." Cong. Globe, 42d Cong., 2d Sess., 1585. Congress enacted the last checkerboard land-grant statute for railroads in 1871. Gates, supra, at 380. Still wishing to encourage railroad construction, however, Congress passed at least 15 special acts between 1871 and 1875 granting to designated railroads "the right of way" through public lands, without any accompanying land subsidy. Great Northern R. Co. v. United States, 315 U.S. 262, 274, and n. 9, 62 S.Ct. 529, 86 L.Ed. 836 (1942). Rather than continue to enact special legislation for each such right of way, Congress passed the General Railroad Right-of-Way Act of 1875, 18 Stat. 482, 43 U.S.C. § 934 - 939. The 1875 Act provided that "[t]he right of way through the public lands of the United States is granted to any railroad company" meeting certain requirements, "to the extent of one hundred feet on each side of the central line of said road." § 934. A railroad company could obtain a right of way by the "actual construction of its road" or "in advance of construction by filing a map as provided in section four" of the Act. Jamestown & Northern R. Co. v. Jones, 177 U.S. 125, 130-131, 20 S.Ct. 568, 44 L.Ed. 698 (1900). Section 4 in turn provided that a company could "secure" its right of way by filing a proposed map of its rail corridor with a local Department of the Interior office within 12 months after survey or location of the road. § 937. Upon approval by the Interior Department, the right of way would be noted on the land plats held at the local office, and from that day forward "all such lands over which such right of way shall pass shall be disposed of subject to the right of way." Ibid. The 1875 Act remained in effect until 1976, when its provisions governing the issuance of new rights of way were repealed by the Federal Land Policy and Management Act, § 706(a), 90 Stat. 2793. This case requires us to define the nature of the interest granted by the 1875 Act, in order to determine what happens when a railroad abandons its right of way. B Melvin M. Brandt began working at a sawmill in Fox Park, Wyoming, in 1939. He later purchased the sawmill and, in 1946, moved his family to Fox Park. Melvin's son Marvin started working at the sawmill in 1958 and came to own and operate it in 1976 until it closed, 15 years later. In 1976, the United States patented an 83-acre parcel of land in Fox Park, surrounded by the Medicine Bow-Routt National Forest, to Melvin and Lulu Brandt. (A land patent is an official document reflecting a grant by a sovereign that is made public, or "patent.") The patent conveyed to the Brandts fee simple title to the land "with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging, unto said claimants, their successors and assigns, forever." App. to Pet. for Cert. 76. But the patent did include limited exceptions and reservations. For example, the patent "except[s] and reserv[es] to the United States from the land granted a right-of-way thereon for ditches or canals constructed by the authority of the United States"; "reserv[es] to the United States . a right-of-way for the existing Platte Access Road No. 512"; and "reserv[es] to the United States . a right-of-way for the existing Dry Park Road No. 517." Id., at 76-77 (capitalization omitted). But if those roads cease to be used by the United States or its assigns for a period of five years, the patent provides that "the easement traversed thereby shall terminate." Id., at 78. Most relevant to this case, the patent concludes by stating that the land was granted "subject to those rights for railroad purposes as have been granted to the Laramie[,] Hahn's Peak & Pacific Railway Company, its successors or assigns." Ibid. (capitalization omitted). The patent did not specify what would occur if the railroad abandoned this right of way. The right of way referred to in the patent was obtained by the Laramie, Hahn's Peak and Pacific Railroad (LHP & P) in 1908, pursuant to the 1875 Act. The right of way is 66 miles long and 200 feet wide, and it meanders south from Laramie, Wyoming, through the Medicine Bow-Routt National Forest, to the Wyoming-Colorado border. Nearly a half-mile stretch of the right of way crosses Brandt's land in Fox Park, covering ten acres of that parcel. In 1911, the LHP & P completed construction of its railway over the right of way, from Laramie to Coalmont, Colorado. Its proprietors had rosy expectations, proclaiming that it would become "one of the most important railroad systems in this country." Laramie, Hahns Peak and Pacific Railway System: The Direct Gateway to Southern Wyoming, Northern Colorado, and Eastern Utah 24 (1910). But the railroad ultimately fell short of that goal. Rather than shipping coal and other valuable ores as originally hoped, the LHP & P was used primarily to transport timber and cattle. R. King, Trails to Rails: A History of Wyoming's Railroads 90 (2003). Largely because of high operating costs during Wyoming winters, the LHP & P never quite achieved financial stability. It changed hands numerous times from 1914 until 1935, when it was acquired by the Union Pacific Railroad at the urging of the Interstate Commerce Commission. Ibid. ; S. Thybony, R. Rosenberg, & E. Rosenberg, The Medicine Bows: Wyoming's Mountain Country 136-138 (1985); F. Hollenback, The Laramie Plains Line 47-49 (1960). In 1987, the Union Pacific sold the rail line, including the right of way, to the Wyoming and Colorado Railroad, which planned to use it as a tourist attraction. King, supra, at 90. That did not prove profitable either, and in 1996 the Wyoming and Colorado notified the Surface Transportation Board of its intent to abandon the right of way. The railroad tore up the tracks and ties and, after receiving Board approval, completed abandonment in 2004. In 2006 the United States initiated this action seeking a judicial declaration of abandonment and an order quieting title in the United States to the abandoned right of way. In addition to the railroad, the Government named as defendants the owners of 31 parcels of land crossed by the abandoned right of way. The Government settled with or obtained a default judgment against all but one of those landowners-Marvin Brandt. He contested the Government's claim and filed a counterclaim on behalf of a family trust that now owns the Fox Park parcel, and himself as trustee. Brandt asserted that the stretch of the right of way crossing his family's land was a mere easement that was extinguished upon abandonment by the railroad, so that, under common law property rules, he enjoyed full title to the land without the burden of the easement. The Government countered that it had all along retained a reversionary interest in the railroad right of way-that is, a future estate that would be restored to the United States if the railroad abandoned or forfeited its interest. The District Court granted summary judgment to the Government and quieted title in the United States to the right of way over Brandt's land. 2008 WL 7185272 (D.Wyo., Apr. 8, 2008). The Court of Appeals affirmed. United States v. Brandt, 496 Fed.Appx. 822 (C.A.10 2012) (per curiam ). The court acknowledged division among lower courts regarding the nature of the Government's interest (if any) in abandoned 1875 Act rights of way. But it concluded based on Circuit precedent that the United States had retained an "implied reversionary interest" in the right of way, which then vested in the United States when the right of way was relinquished. Id., at 824. We granted certiorari. 570 U.S. -, 134 S.Ct. 48, 186 L.Ed.2d 962 (2013). II This dispute turns on the nature of the interest the United States conveyed to the LHP & P in 1908 pursuant to the 1875 Act. Brandt contends that the right of way granted under the 1875 Act was an easement, so that when the railroad abandoned it, the underlying land (Brandt's Fox Park parcel) simply became unburdened of the easement. The Government does not dispute that easements normally work this way, but maintains that the 1875 Act granted the railroads something more than an easement, reserving an implied reversionary interest in that something more to the United States. The Government loses that argument today, in large part because it won when it argued the opposite before this Court more than 70 years ago, in the case of Great Northern Railway Co. v. United States, 315 U.S. 262, 62 S.Ct. 529, 86 L.Ed. 836 (1942). In 1907, Great Northern succeeded to an 1875 Act right of way that ran through public lands in Glacier County, Montana. Oil was later discovered in the area, and Great Northern wanted to drill beneath its right of way. But the Government sued to enjoin the railroad from doing so, claiming that the railroad had only an easement, so that the United States retained all interests beneath the surface. This Court had indeed previously held that the pre-1871 statutes, granting rights of way accompanied by checkerboard land subsidies, conveyed to the railroads "a limited fee, made on an implied condition of reverter." See, e.g., Northern Pacific R. Co. v. Townsend, 190 U.S. 267, 271, 23 S.Ct. 671, 47 L.Ed. 1044 (1903). Great Northern relied on those cases to contend that it owned a "fee" interest in the right of way, which included the right to drill for minerals beneath the surface. The Government disagreed. It argued that "the 1875 Act granted an easement and nothing more," and that the railroad accordingly could claim no interest in the resources beneath the surface. Brief for United States in Great Northern R. Co. v. United States, O.T. 1941, No. 149, p. 29. "The year 1871 marks the end of one era and the beginning of a new in American land-grant history," the Government contended; thus, cases construing the pre-1871 statutes were inapplicable in construing the 1875 Act, id., at 15, 29-30. Instead, the Government argued, the text, background, and subsequent administrative and congressional construction of the 1875 Act all made clear that, unlike rights of way granted under pre-1871 land-grant statutes, those granted under the 1875 Act were mere easements. The Court adopted the United States' position in full, holding that the 1875 Act "clearly grants only an easement, and not a fee." Great Northern, 315 U.S., at 271, 62 S.Ct. 529. The Court found Section 4 of the Act "especially persuasive," because it provided that "all such lands over which such right of way shall pass shall be disposed of subject to such right of way." Ibid. Calling this language "wholly inconsistent" with the grant of a fee interest, the Court endorsed the lower court's statement that "[a]pter words to indicate the intent to convey an easement would be difficult to find." Ibid. That interpretation was confirmed, the Court explained, by the historical background against which the 1875 Act was passed and by subsequent administrative and congressional interpretation. The Court accepted the Government's position that prior cases describing the nature of pre-1871 rights of way-including Townsend, supra, at 271, 23 S.Ct. 671 -were "not controlling," because of the shift in congressional policy after that year. Great Northern, supra, at 277-278, and n. 18, 62 S.Ct. 529. The Court also specifically disavowed the characterization of an 1875 Act right of way in Rio Grande Western R. Co. v. Stringham, 239 U.S. 44, 36 S.Ct. 5, 60 L.Ed. 136 (1915), as " 'a limited fee, made on an implied condition of reverter.' " Great Northern, supra, at 278-279, 62 S.Ct. 529 (quoting Stringham, supra, at 47, 36 S.Ct. 5). The Court noted that in Stringham "it does not appear that Congress' change of policy after 1871 was brought to the Court's attention," given that "[n]o brief was filed by the defendant or the United States" in that case. Great Northern, supra, at 279, and n. 20, 62 S.Ct. 529. The dissent is wrong to conclude that Great Northern merely held that "the right of way did not confer one particular attribute of fee title." Post, at 1270 (opinion of SOTOMAYOR, J.). To the contrary, the Court specifically rejected the notion that the right of way conferred even a "limited fee." 315 U.S., at 279, 62 S.Ct. 529; see also id., at 277-278, 62 S.Ct. 529 (declining to follow cases describing a right of way as a "limited," "base," or "qualified" fee). Instead, the Court concluded, it was "clear from the language of the Act, its legislative history, its early administrative interpretation and the construction placed upon it by Congress in subsequent enactments" that the railroad had obtained "only an easement in its rights of way acquired under the Act of 1875." Id. , at 277, 62 S.Ct. 529; see United States v. Union Pacific R. Co., 353 U.S. 112, 119, 77 S.Ct. 685, 1 L.Ed.2d 693 (1957) (noting the conclusion in Great Northern that, in the period after 1871, "only an easement for railroad purposes was granted"); 353 U.S., at 128, 77 S.Ct. 685 (Frankfurter, J., dissenting) (observing that the Court "conclude[d] in the Great Northern case that a right of way granted by the 1875 Act was an easement and not a limited fee"). When the United States patented the Fox Park parcel to Brandt's parents in 1976, it conveyed fee simple title to that land, "subject to those rights for railroad purposes" that had been granted to the LHP & P. The United States did not reserve to itself any interest in the right of way in that patent. Under Great Northern , the railroad thus had an easement in its right of way over land owned by the Brandts. The essential features of easements-including, most important here, what happens when they cease to be used-are well settled as a matter of property law. An easement is a "nonpossessory right to enter and use land in the possession of another and obligates the possessor not to interfere with the uses authorized by the easement." Restatement (Third) of Property: Servitudes § 1.2(1) (1998). "Unlike most possessory estates, easements . may be unilaterally terminated by abandonment, leaving the servient owner with a possessory estate unencumbered by the servitude." Id., § 1.2, Comment d ; id., § 7.4, Comments a, f . In other words, if the beneficiary of the easement abandons it, the easement disappears, and the landowner resumes his full and unencumbered interest in the land. See Smith v. Townsend, 148 U.S. 490, 499, 13 S.Ct. 634, 37 L.Ed. 533 (1893) ("[W]hoever obtained title from the government to any . land through which ran this right of way would acquire a fee to the whole tract subject to the easement of the company, and if ever the use of that right of way was abandoned by the railroad company the easement would cease, and the full title to that right of way would vest in the patentee of the land"); 16 Op. Atty. Gen. 250, 254 (1879) ("the purchasers or grantees of the United States took the fee of the lands patented to them subject to the easement created by the act of 1824; but on a discontinuance or abandonment of that right of way the entire and exclusive property, and right of enjoyment thereto, vested in the proprietors of the soil"). Those basic common law principles resolve this case. When the Wyoming and Colorado Railroad abandoned the right of way in 2004, the easement referred to in the Brandt patent terminated. Brandt's land became unburdened of the easement, conferring on him the same full rights over the right of way as he enjoyed over the rest of the Fox Park parcel. III Contrary to that straightforward conclusion, the Government now tells us that Great Northern did not really mean what it said. Emphasizing that Great Northern involved only the question of who owned the oil and minerals beneath a right of way, the Government asks the Court to limit its characterization of 1875 Act rights of way as "easements" to that context. Even if the right of way has some features of an easement-such as granting only a surface interest to the railroad when the Government wants the subsurface oil and minerals-the Government asks us to hold that the right of way is not an easement for purposes of what happens when the railroad stops using it. But nothing in the text of the 1875 Act supports such an improbable (and self-serving) reading. The Government argues that the similarity in the language of the 1875 Act and the pre-1871 statutes shows that Congress intended to reserve a reversionary interest in the lands granted under the 1875 Act, just as it did in the pre-1871 statutes. See Brief for United States 17-18. But that is directly contrary to the very premise of this Court's decision (and the Government's argument) in Great Northern : that the 1875 Act granted a fundamentally different interest in the rights of way than did the predecessor statutes. 315 U.S., at 277-278, 62 S.Ct. 529; see U.S. Great Northern Brief 30 ("[Great Northern's] argument . fails because it disregards the essential differences between the 1875 Act and its predecessors."). Contrary to the Government's position now-but consistent with the Government's position in 1942- Great Northern stands for the proposition that the pre-1871 statutes (and this Court's decisions construing them) have little relevance to the question of what interest the 1875 Act conveyed to railroads. The Government next contends that this Court's decisions in Stalker v. Oregon Short Line R. Co., 225 U.S. 142, 32 S.Ct. 636, 56 L.Ed. 1027 (1912), and Great Northern R. Co. v. Steinke, 261 U.S. 119, 43 S.Ct. 316, 67 L.Ed. 564 (1923), support its position that the United States retains an implied reversionary interest in 1875 Act rights of way. Brief for United States 28-32. According to the Government, both Stalker and Steinke demonstrate that those rights of way cannot be bare common law easements, because those cases concluded that patents purporting to convey the land underlying a right of way were "inoperative to pass title." Brief for United States 31 (quoting Steinke, supra, at 131, 43 S.Ct. 316); see also Tr. of Oral Arg. 28-30, 33, 40-41, 44-45. If the right of way were a mere easement, the argument goes, the patent would have passed title to the underlying land subject to the railroad's right of way, rather than failing to pass title altogether. But that is a substantial overreading of those cases. In both Stalker and Steinke, a railroad that had already obtained an 1875 Act right of way thereafter claimed adjacent land for station grounds under the Act, as it was permitted to do because of its right of way. A homesteader subsequently filed a claim to the same land, unaware of the station grounds. The question in each case was whether the railroad could build on the station grounds, notwithstanding a subsequent patent to the homesteader. The homesteader claimed priority because the railroad's station grounds map had not been recorded in the local land office at the time the homesteader filed his claim. This Court construed the 1875 Act to give the railroad priority because it had submitted its proposed map to the Department of the Interior before the homesteader filed his claim. See Stalker, supra, at 148-154, 32 S.Ct. 636; Steinke,supra, at 125-129, 43 S.Ct. 316. The dispute in each case was framed in terms of competing claims to the right to acquire and develop the same tract of land. The Court ruled for the railroad, but did not purport to define the precise nature of the interest granted under the 1875 Act. Indeed, it does not appear that the Court in either case considered-much less rejected-an argument that the railroad had obtained only an easement in the contested land, so that the patent could still convey title to the homesteader. In any event, to the extent that Stalker and Steinke could be read to imply that the railroads had been granted something more than an easement, any such implication would not have survived this Court's unequivocal statement in Great Northern that the 1875 Act "clearly grants only an easement, and not a fee." 315 U.S., at 271, 62 S.Ct. 529. Finally, the Government relies on a number of later enacted statutes that it says demonstrate that Congress believed the United States had retained a reversionary interest in the 1875 Act rights of way. Brief for United States 34-42. But each of those statutes purported only to dispose of interests the United States already possessed, not to create or modify any such interests in the first place. First, in 1906 and 1909, Congress declared forfeited any right of way on which a railroad had not been constructed in the five years after the location of the road. 43 U.S.C. § 940. The United States would "resume[ ] the full title to the lands covered thereby free and discharged of such easement," but the forfeited right of way would immediately "inure to the benefit of any owner or owners of land conveyed by the United States prior to such date." Ibid. Then, in 1922, Congress provided that whenever a railroad forfeited or officially abandoned its right of way, "all right, title, interest, and estate of the United States in said lands" (other than land that had been converted to a public highway) would immediately be transferred to either the municipality in which it was located, or else to the person who owned the underlying land. 43 U.S.C. § 912. Finally, as part of the National Trails System Improvements Act of 1988, Congress changed course and sought to retain title to abandoned or forfeited railroad rights of way, specifying that "any and all right, title, interest, and estate of the United States" in such rights of way "shall remain in the United States" upon abandonment or forfeiture. 16 U.S.C. § 1248(c). The Government argues that these statutes prove that Congress intended to retain (or at least believed it had retained) a reversionary interest in 1875 Act rights of way. Otherwise, the argument goes, these later statutes providing for the disposition of the abandoned or forfeited strips of land would have been meaningless. That is wrong. This case turns on what kind of interest Congress granted to railroads in their rights of way in 1875. Cf. Leo Sheep Co., 440 U.S., at 681, 99 S.Ct. 1403 ("The pertinent inquiry in this case is the intent of Congress when it granted land to the Union Pacific in 1862."). Great Northern answered that question: an easement. The statutes the Government cites do not purport to define (or redefine) the nature of the interest conveyed under the 1875 Act. Nor do they shed light on what kind of property interest Congress intended to convey to railroads in 1875. See United States v. Price, 361 U.S. 304, 313, 80 S.Ct. 326, 4 L.Ed.2d 334 (1960) ("the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one"). In other words, these statutes do not tell us whether the United States has an interest in any particular right of way; they simply tell us how any interest the United States might have should be disposed of. For pre-1871 rights of way in which the United States retained an implied reversionary interest, or for rights of way crossing public lands, these statutes might make a difference in what happens to a forfeited or abandoned right of way. But if there is no "right, title, interest, [or] estate of the United States" in the right of way, 43 U.S.C. § 912, then the statutes simply do not apply. We cannot overlook the irony in the Government's argument based on Sections 912 and 940. Those provisions plainly evince Congress's intent to divest the United States of any title or interest it had retained to railroad rights of way, and to vest that interest in individuals to whom the underlying land had been patented-in other words, people just like the Brandts. It was not until 1988-12 years after the United States patented the Fox Park parcel to the Brandts-that Congress did an about-face and attempted to reserve the rights of way to the United States. That policy shift cannot operate to create an interest in land that the Government had already given away. More than 70 years ago, the Government argued before this Court that a right of way granted under the 1875 Act was a simple easement. The Court was persuaded, and so ruled. Now the Government argues that such a right of way is tantamount to a limited fee with an implied reversionary interest. We decline to endorse such a stark change in position, especially given "the special need for certainty and predictability where land titles are concerned." Leo Sheep Co., supra, at 687, 99 S.Ct. 1403. The judgment of the United States Court of Appeals for the Tenth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. Locals at the time translated the acronym LHP & P as "Lord Help Push and Pull" or "Late, Hard Pressed, and Panicky." S. Thybony, R. Rosenberg, & E. Rosenberg, The Medicine Bows: Wyoming's Mountain Country 136 (1985). The other landowners had a potential interest in much smaller acreages: No other party could claim an interest in more than three acres of the right of way, and only six of the 31 potential claims amounted to more than one acre. See Amended Complaint in No. 06-CV-0184J etc. (D Wyo.), ¶ 6-10. The District Court dismissed without prejudice Brandt's separate counterclaim for just compensation. Brandt then filed a takings claim in the Court of Federal Claims. That case has been stayed pending the disposition of this one. Because granting an easement merely gives the grantee the right to enter and use the grantor's land for a certain purpose, but does not give the grantee any possessory interest in the land, it does not make sense under common law property principles to speak of the grantor of an easement having retained a "reversionary interest." A reversionary interest is "any future interest left in a transferor or his successor in interest." Restatement (First) of Property § 154(1)(1936). It arises when the grantor "transfers less than his entire interest" in a piece of land, and it is either certain or possible that he will retake the transferred interest at a future date. Id., Comment a . Because the grantor of an easement has not transferred his estate or possessory interest, he has not retained a reversionary interest. He retains all his ownership interest, subject to an easement. See Preseault v. United States, 100 F.3d 1525, 1533-1534 (C.A.Fed.1996) (en banc). The dissent invokes the principle that "any ambiguity in land grants 'is to be resolved favorably to a sovereign grantor,' " post, at 1269 (quoting Great Northern R. Co. v . United States, 315 U.S. 262, 272, 62 S.Ct. 529, 86 L.Ed. 836 (1942) ), but the Solicitor General does not-for a very good reason. The Government's argument here is that it gave away more in the land grant than an easement, so that more should revert to it now. A principle that ambiguous grants should be construed in favor of the sovereign hurts rather than helps that argument. The dissent's quotation is indeed from Great Northern , where the principle was cited in support of the Government's argument that its 1875 Act grant conveyed "only an easement, and not a fee." Id., at 271, 62 S.Ct. 529.

279 U.S. 820

Per Curiam: Affirmed on the authority of Ownbey v. Morgan, 256 U. S. 94, 109; Coffin Bros. v. Bennett, 277 U. S. 29, 31.

66 T.C. 27

Tannenwald, Judge: In these consolidated cases, respondent determined the following deficiencies in petitioners' Federal income taxes: Addition to tax Docket No. Year Income tax (sec. 6651(a)) 5404-67_ 1962 $7,768.25 5868-67_ 1963 59,370.48 $3,705.19 1964 93,676.87 All issues save one have been resolved, with the result that the only question remaining for our consideration is whether the petitioners are entitled to the benefits of income averaging under sections 1301 through 1305 for the taxable year 1964. FINDINGS OF FACT Petitioners, husband and wife, resided in New York, N.Y., at the time of filing their petitions herein. They filed Federal income tax returns with the District Director of Internal Revenue, New York, N.Y., for the taxable years 1960 through 1964. Neither petitioner filed a Federal income tax return for 1959. Petitioners were Cuban residents at the time Fidel Castro acceded to power on January 1, 1959. They had enjoyed much affluence in Cuba where Jose was a sugar and stock broker. Both Jose and Adela owned valuable real and personal property in Cuba. When he realized that he could not successfully continue his business in Cuba under the new government, Jose resolved that his family would relocate in the United States. All of petitioners' property remaining in Cuba was expropriated by the Cuban Government under circumstances which respondent concedes constituted a deductible loss. Jose held a Cuban passport issued on April 24, 1958, which contained a nonimmigrant visa issued by the American Embassy on October 8, 1958, "valid for unlimited applications for admission into the United States if presented before October 7, 1962." He was admitted to the United States and readmitted to Cuba on the following dates, remaining in the United States and Cuba during the intervening periods except as hereinafter noted: Admitted to United States Readmitted to Cuba Dec. 6,1958 Jan. 30,1959 Feb. 3 or 9,1959 Feb. 15,1959 Feb. 18,1959 Mar. 5,1959 Aug. 8,1959 Jan. 22,1960 Feb. 14,1960 Feb. 24,1960 Mar. 15,1960 Jose went to France from the United States on or about August 19, 1959, and returned to the United States on September 15, 1959. Jose was not in Cuba after March 15, 1960. He applied for permanent residence status in the United States at Montreal, Canada, on June 20,1961, and became a United States citizen on July 18,1966. Jose rented an apartment in New York for a number of years prior to August 8, 1959. He also utilized office space and secretarial services at Bache & Co. in New York, N.Y., starting in early 1959. When Jose departed from Cuba in August 1959, he left his house in Havana open and occupied by two of his servants and he lived in that house during the periods when he was in Cuba prior to March 15,1960. He worked actively in Cuba as a sugar broker until that date. Prior to that date, he utilized the same social clubs in Cuba of which he had been and continued to be a member. In the early months of 1960, Jose's Havana brokerage office was placed under surveillance by the Cuban authorities, as was his house 3 days before he departed from Cuba on March 15, 1960. He realized at that time that his business in Cuba was "gone" and decided to stay in New York permanently. His brokerage office in Havana was closed in June or July of 1960. Jose began his employment relationship with Bache & Co. in New York, N.Y., in March 1960, and first received a drawing account in that month or the following month. ULTIMATE FINDING OF FACT Jose was a nonresident alien for at least part of I960. OPINION After application of the net operating loss and net operating loss carryforwards arising from their Cuban expropriation losses, petitioners had no taxable income for the years 1960 through 1963. For the taxable year 1964, petitioners had taxable income of $204,747.19. We have found as an ultimate fact and hold that Jose was a nonresident alien for part of 1960. We must now decide whether petitioners are precluded by that holding from obtaining the benefits of income averaging for 1964. This issue depends upon whether the entire year 1960 during part of which Jose was a nonresident or only that part of 1960 during which Jose was a resident alien is to be included in the 4-year base period for income averaging. Section 1303(b) provides that an individual shall not be eligible for income averaging if such individual was a nonresident alien "at any time" during the computation year or during "the base period." The computation year is the year for which the taxpayer elects the benefits of averaging (sec. 1302(e)(1)), in this case 1964, and "the base period" is defined as "the 4 taxable years immediately preceding the computation year" (sec. 1302(e)(2)). Petitioners argue that Jose did not become subject to United States income tax until he became a resident alien and that therefore his 1960 "taxable year" consists of only that portion of the calendar year during which he had that status. Respondent argues that the entire calendar year 1960 must be taken into account in determining "the base period" and that therefore petitioners are ineligible for income averaging under section 1303(b). We hold for respondent. Petitioners refer us to section 7701(a)(23) which defines the term "taxable year" as the calendar or fiscal year for which taxable income is computed or, in the case of a return made for a fractional part of a year, the period for which such return is made. Because section 871(a) provides for the taxation of nonresident aliens only on income received from sources within the United States and because Jose alleges he had no such income during that portion of 1960 when he was not a United States resident, petitioners conclude that Jose had a "short taxable year" consisting of only that portion of the calendar year during which Jose was a United States resident and liable for Federal income taxes. Petitioners make further reference to section 1304(g) for the proposition that short taxable years are includable as base period years. The regulations promulgated under section 1304(g) only address short taxable years recognized by section 443. Petitioners concede that their situation does not fall within section 443, but argue that the general import of section 1304(g) is broader than the scope of respondent's regulations and section 443. Petitioners' analysis of the applicable statutory provisions is misconceived. The concept of a "taxable year" is clearly articulated in the Code. Thus, section 7701(a)(23) contains the following definition: TAXABLE YEAR. — The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary or his delegate, the period for which such return is made. Section 443 (contained in subtitle A) deals specifically with returns for a period of less than 12 months in three explicit situations, i.e., change of an annual accounting period, taxpayer not in existence for an entire taxable year, and termination of a taxable year for jeopardy. It is clear, as petitioners concede, that section 443 does not apply herein. It is not enough that a nonresident alien may not have any tax liability because he has no taxable income from United States sources. The fact is that, as a category, nonresident aliens are subject to United States income tax, albeit that their liability attaches only to certain types of income. See sec. 871, et seq.; Georges Simenon, 44 T.C. 820, 832-833 (1965); Matthew Klaas, 36 T.C. 239, 242-244 (1961); cf. John C. Lee, 6 B.T.A. 1005 (1927); see Samann v. Commissioner, 313 F. 2d 461, 464 (4th Cir. 1963) ("income may be taxed and untaxed during parts of the same year"). Consequently, Jose was not a taxpayer "not in existence" (see sec. 443(a)(2)) during that portion of 1960 preceding the time he became a resident alien. Since Jose's circumstances in 1960 do not conform to those specified in section 443 and since Jose never attempted to adopt an annual accounting period other than the calendar year, Jose's 1960 taxable year must be deemed to be the calendar year. Sec. 441; sec. 1.441-1, Income Tax Regs. See Georges Simenon, supra. Essentially what petitioner seeks to do is to have us adopt a concept of a "taxable period" other than a calendar year and equate this period with a short "taxable year." This we have refused to do in the case of departing resident aliens whose taxable period was terminated pursuant to section 6851 and who sought to file a joint return for such period. Matthew Klaas, supra. We see no reason for a different rule to obtain in respect of incoming aliens. Finally section 6072(c) speaks only in terms of calendar or fiscal years with reference to nonresident aliens. Thus, petitioners' concept of a "short taxable year" has no statutory foundation. Respondent's long-standing policy has been to treat taxpayers such as Jose as dual-status taxpayers for the year in which residency is changed, to require of such taxpayers a tax return prepared on Form 1040 for the taxpayer's entire annual accounting period, and to report separately therein income derived during the taxpayer's period of residency and the taxpayer's period of nonresidency. The requirement of making a full-year return is not altered or suspended by the fact that a taxpayer may have had no income taxable in the United States during his period of nonresidency. See p. 31 supra. The respondent's position in respect of this point has been cited with apparent approval in Georges Simenon, supra. Finally, petitioners' interpretation of the income averaging provisions does violence to legislative intent. In enacting those provisions, Congress was particularly concerned that— the individual's income must have been subject to tax by the United States throughout the entire base period as well as the computation year. No one is eligible for averaging who was a nonresident alien in any of the 4 base period years or in the computation year. [S. Rept. No. 830, 88th Cong., 2d Sess. 144 (1964), 1964-1 (Part 2) C. B. 505,648.] In the case of a citizen who had excludable foreign source income during the base period, Congress felt that, by requiring the taxpayer to add back his excludable foreign source income to his base period income, the above-stated policy could be effectuated. S. Rept. No. 830, supra at 142, 1964-1 (Part 2) C.B. at 646. Since no similar provisions obtain in respect of a taxpayer who was a nonresident alien having no income subject to Federal taxes during part of his base period, the intent of Congress in enacting section 1303(b) is plain, namely, that the nonresident alien not be afforded an undue tax advantage in the area of income averaging. We conclude that an alien's annual accounting period is his taxable year and such year is not affected by a change in residency status. In view of our holding that Jose was a nonresident alien for part of 1960, a base period year, we further conclude that petitioners are not eligible to elect income averaging for the taxable year 1964 under section 1303(b). To reflect the parties' resolution of other issues, Decisions will be entered under Rule 155. All references are to the Internal Revenue Code of 1954 as amended and in effect during the year at issue. This finding coincides with the finding made from the bench at the conclusion of the trial except that it is somewhat broader in that the latter finding was pinpointed to Jan. 2, 1960. We have broadened our finding in order to avoid any possible question arising from the fact that Jan. 1,1960, was a legal holiday — a question which, we note, neither party has raised. These sections presently appear in the Code as secs. 1302(c)(1) and 1302(c)(2), respectively. Respondent does not challenge this point. Presently sec. 1304(f). Sec. 1.1304-7, Income Tax Regs., redesignated sec. 1.1304-6, Income Tax Regs., by T.D. 7196,1972-2 C.B. 499. Sec. 443 admits of short taxable years in three situations: (1) Where a taxpayer has changed his annual accounting period, (2) where a taxpayer was not in existence for an entire taxable year, and (3) where a taxpayer's taxable year has been terminated for jeopardy. Sec. 6013(a)(1) precludes the filing of a joint return for a taxable year in which either spouse was a nonresident alien at any time. We note that petitioners herein originally filed a joint return for 1960. They subsequently filed amended returns on a "married — filing separately" basis. Petitioners do not now claim that their original joint return was proper under sec. 6013 on the basis of their position that 1960 was a short taxable year during which neither spouse was a nonresident alien. This policy dates back to G.C.M. 10759, XI-2 C.B. 99 (1932), and is more recently embodied in secs. 1.871-13(a) and 1.6012-l(b)(2)(ii)(a), Income Tax Regs. See also Rev. Rul, 56-365,1956-2 C.B. 934, and I.R.S. Pub. No. 519, United States Tax Guide for Aliens (1975). Petitioners also argue that this dual type of reporting for a year in which an alien changes residency bolsters their assertion that Jose had a short taxable year consisting of only that portion of the 1960 calendar year in which he had reportable income. But, the very provision cited by petitioners, sec. 1.6012-l(b)(2)(ii)(a), Income Tax Regs., contains language undermining their position: "If an alien individual becomes a citizen or resident of the United States during the taxable year. " (Emphasis added.) We note, however, that this regulation is only applicable for taxable years beginning after Dec. 31,1966. Under petitioners' theory, it would be of no matter whether an alien assumed United States residency on Jan. 2 or Dec. 30 of his first base period year so long as he had no income taxable in the United States during his period of nonresidency. In the latter case, conceivably, an alien could reside in this country for 1 day and have $1 or even no taxable income for his dual-status year and this 1 day would represent a "short taxable year" includable as a base period year over which subsequent years' income could be spread. The relief envisioned by the income averaging provisions surely was not intended to encompass this type of situation.

379 U.S. 862

District Court of Appeal of California, Second Appellate District. Certiorari denied.

177 L. Ed. 2d 303

Petition for writ of certiorari to the United States Court of Appeals for the Eleventh Circuit denied. Same case below, 587 F.3d 1288.

522 U.S. 1134

C. A. 7th Cir. Certiorari denied.

5 Cust. Ct. 463

Keefe, Judge: These reappraisements listed in schedule A, hereto attached and made a part hereof, involve certain German glassware upon which the importer added to the invoice prices upon entry to meet advances by the appraiser in the test cases, reappraisements 112210-A, etc., decided on review by the Second Division of this court on October 23, 1939, see Reap. Dec. 4662, wherein it was held that the export value of the merchandise was represented by the unit invoice prices, plus cases and packing as invoiced. At the trial of these cases the record in reappraisement 112210-A was offered and admitted in evidence without objection by the Government. Following the decision cited, we hold that the export value of the German glassware in question is unit invoice prices, plus cases and packing as invoiced. Judgment will therefore be entered in favor of the plaintiff.

268 U.S. App. D.C. 307

ORDER PER CURIAM. Upon consideration of Appellant's Emergency Motion for Provisional Injunctive Relief and the Opposition thereto, it is ORDERED by the court that the motion be granted. The proposed merger of appellees Owens-Illinois, Incorporated and Brockway, Incorporated is therefore enjoined until further order of the court. It is FURTHER ORDERED that appellant file its motion for injunction pending appeal, if any, by 12:00 p.m., February 23, 1988. Appellees' response is due no later than 10:00 a.m., February 24, 1988. This order is not to be understood by the parties as an indication of how the court will rule on the merits of any request for injunctive relief pending appeal. The pur-' pose of this order is only to allow the parties .and the court additional time to assess whether injunctive relief is warranted by the facts of this case.

456 U.S. 1005

C. A. 9th Cir. Certiorari granted.

532 U.S. 1039

C. A. 2d Cir. Certio-rari denied.

13 Ct. Int'l Trade 622

Opinion Tsoucalas, Judge: Plaintiff Marsuda-Rodgers International, a United States importer of tapered roller bearings (TRBs) from Hungary, contests the United States International Trade Commission's (Commission) cumulation of imported TRBs from Hungary with those from Japan, Italy, the People's Republic of China (PRC), Romania, and Yugoslavia; See Tapered Roller Bearings and Parts Thereof, and Certain Housings Incorporating Tapered Rollers From Hungary, the People's Republic of China, and Romania, Inv. Nos. 731-TA-341, 344, and 345 (Final), USITC Pub. 1983 (June 1987). Plaintiff contends that the Commission erroneously used the cumu-lation methodology because the low quality Hungarian TRBs do not compete with high quality Japanese, Italian, and domestic TRBs within the meaning of the cumulation statute, 19 U.S.C. § 1677(7)(C)(iv) (1984 & Supp. V 1987). The two main issues in contention are as follows; (1) whether the criteria the Commission used to make a finding of competition are reasonable, and (2) whether substantial evidence in the record supports the Commission's finding of competition. For reasons set forth below, the Court finds that the competition factors that the Commission applied in this case are not reasonable because there is insufficient evidence of a reasonable overlap in sales between low quality imported TRBs from Hungary and domestic like products. Therefore, the Court reverses the Commission's cumulation under the facts of this case and remands this action. Background On August 25, 1986, The Timken Company, the defendant-inter-venor, filed a petition with the International Trade Administration of the United States Department of Commerce (ITA) and with the Commission alleging that the United States industry is materially injured, or is threatened with material injury, by reason of less than fair value (LTFV) sales of TRBs from Hungary, the PRC, Romania, Yugoslavia, Italy, and Japan. 51 Fed. Reg. 31,732 (Sept. 4, 1986); Upon investigation, ITA made six separate final determinations, concluding that TRBs from all six countries listed in the petition are sold in the United States at LTFV. The Commission also found material injury to the domestic industry by reason of unfairly traded imports, pursuant to 19 U.S.C. § 1673d(b)(l) (1982). In making this material injury determination, the Commission used the cumulation methodology, pursuant to 19 U.S.C. § 1677(7)(C)(iv). In general, the Commission makes its material injury determination by evaluating unfairly traded imports from a single foreign country source at a time. When sources of LTFV imports of products subject to investigation exist in more than one country, the cumulation statute mandates the Commission to cumulatively assess the injury data, i.e., the volume of the import, its effect on prices for like products in the United States, and its impact on the affected domestic industry, in certain circumstances. The cumulation statute reads as follows: (iv) Cumulation: For purposes of [making injury determinations], the Commission shall cumulatively assess the volume and effect of imports from two or more countries of like products subject to investigation if such imports compete with each other arid with like products of the domestic industry in the United States market. (Emphasis supplied). Id. Under this provision, the subject imports which allegedly injure the domestic industry must (1) compete with other imports and with the domestic like products; and (2) be subject to investigation. The Commission determined that the statutory requirements for cumu- lation of imported TRBs were satisfied for all six countries under investigation. During the administrative proceedings in the instant case, plaintiff argued that the gap in quality between the Hungarian TRBs on one hand, and the domestic, Japanese, and Italian TRBs, on the other, is so marked that the requisite competition is not present to cumulate. Plaintiff maintained that this quality difference effectively makes the low quality TRBs a distinct product with a discrete position in the tapered roller bearing market. The Commission acknowledged the disparity in quality between Hungarian, Chinese, Romanian, and Yugoslavian TRBs, and their domestic, Japanese, and Italian counterparts, but ruled that such difference does not preclude competition for purposes of cumulation. Certain facts are undisputed in this regard. The TRBs manufactured in the Communist countries are more brittle and less friction-absorbing and have less life expectancy and less precise geometries than the TRBs made in Japan, Italy, and United States. See USITC Pub. 1983 at 13-14. The U.S. sales of imports from the Communist countries are thus restricted to those segments of the tapered roller bearing market, namely, certain non-driving axles (utility trailers and mobile homes), conveyors, and the aftermarket for replacement use, in which the machine parts neither generate a great amount of friction nor require precision. Id. Conversely, the high quality Japanese, Italian, and domestic TRBs serve machinery which necessitate resilient TRBs made with highly precise measurements. These machinery include motor vehicles and related equipment, miscellaneous industrial and agricultural machinery, truck-trailer, railroad and construction equipment, and the aftermarket for replacement use. Id. at A-20-A-22. Notwithstanding this quality difference, and the resulting market segmentation, the Commission reasoned that cumulation of qualitatively inferior Hungarian, Chinese, Romanian, and Yugoslavian TRBs with qualitatively superior Japanese and Italian TRBs is proper because there is competition between them in the low end, less-demanding segments of the market. Discussion A. Competition Standard: 1. Conceptual Framework: In determining whether the multiple-sourced imports "compete with each other and with like products of the domestic industry in the United States market," as provided in 19 U.S.C. § 1677(7)(C)(iv), the Commission's practice is to generally apply the following criteria: (1) the degree of fungibility between imports from different countries and between imports and the domestic like product, including consideration of specific customer requirements and other quality-related questions; (2) the presence of sales or offers to sell in the same geographic markets of imports from different countries and the domestic like product; (3) the existence of common or similar channels of distribution of imports from different countries and the domestic like product; (4) whether the imports are simultaneously present in the market. The Commission does not consider any one of these factors to be outcome-determinative on the question of competition. Rather, the Commission accords varying weight to each of these elements in light of the unique facts of each investigation. Moreover, the Commission may consider factors other than those listed above if it is factually warranted. Although the Commission failed to explicitly specify the factors it used in the competition inquiry, this failure does not, by itself, invalidate the Commission's findings. The Commission's decision to cumulate is presumed to be correct, and the burden of proving otherwise rests on the plaintiff. See 28 U.S.C. § 2639(a)(1) (1982). Indeed, plaintiff does not attack the Commission's failure to specify the competition factors as a ground for reversal, apparently accepting defendants' averment that the Commission employed the four-part test in the instant investigation. Rather, plaintiffs methodological challenge is that this test is not reasonable because it is conceptually analogous to the formula the Commission uses in "like product" analysis. Plaintiff argues that to the extent the standard "competition" is applied to imports which already have been determined to be "like" a domestic product, competition factors must necessarily be more stringent than "like product" criteria. In "like product" analysis, which is made in accordance with 19 U.S.C. § 1677(4)(A) (1982 & Supp. V 1987) for purposes of defining the domestic industry, the Commission considers physical characteristics and uses, interchangeability, channels of distribution, and common manufacturing facilities and production of the product under investigation. Plaintiff asserts that when compared with these "like product" factors, only the first element of the competition test, that is, the issue of fungibility, narrows the scope of "like product" findings. Plaintiff contends that the Com mission is required to focus more closely on the fungibility issue, particularly through an examination of the products' "acceptance by the same purchaser-consumers in the same segment of the market for the same uses." Brief in Support of Plaintiff's Motion for Judgment Upon the Agency Record at 9. In this case, the Commission concluded that all TRBs constitute a single "like product," notwithstanding its finding that TRBs are not essentially fungible. "Owing to the wide range of sizes and uses, tapered roller bearings of all sizes and types are not interchangeable or substitutable." USITC Pub. 1983 at 6. TRBs are designed and sized for specific applications. Sizes of TRBs vary from one-half inch in outside diameter to over 100 inches in outside diameter; and because TRBs are precision machine parts, acceptable variances in their dimensions are often measured in millionths of an inch. Id. at A-4. Industry standardization exists, but the part numbers do not indicate internal geometries and tolerances, thereby preventing even identically numbered TRBs, made by different manufacturers, from being completely interchangeable in their use and application. Id. at A-4-A-6. The analytical distinction that plaintiff draws between the questions of "competition" and "like product" is legitimate and useful for the purpose of reviewing the final determinations of the Commission. Logically, Congress would not have imposed on the Commission the additional requirement of competition if Congress intended to make all "like" products under investigation subject to a cumulation analysis. Therefore, the competition inquiry must necessarily be more vigorous than the "like product" analysis. Plaintiffs argument, however, is deficient insofar as it proposes treatment of the competition inquiry as a pure question of law. The Court agrees with defendants that an examination of the facts on which the Commission based its finding of competition is necessary for resolving whether the competition factors that the Commission used are reasonable, and hence more stringent than the "like product" criteria. 2. Reasonable Overlap Test: The applicable evidentiary standard for determining competition between products is whether there is a "reasonable overlap" in sales between imports, and between imports and domestic product in certain segments of the market. See Fundicao Tupy S.A. v. United States, 12 CIT 6, 678 F. Supp. 898 (1988), aff'd, 859 F.2d 915 (Fed. Cir. 1988) (affirming the determination of the Commission that a finding of competition is warranted because there was "reasonable overlap in the geographic and end-user markets in which the imports and the domestic like product [were] sold." Certain Cast-Iron Pipe Fittings From Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-280 (Final), USITC Pub. 1845 (May 1986) at 9); see also Wieland Werke, AG v. United States, 13 CIT 561, slip op. 89-96 (July 10, 1989); Granges Metallverken AB v. United States, 13 CIT 471, slip op. 89-80 (June 7,1989). In Fundicao Tupy, which affirmed a Commission decision based upon consideration of the very same competition factors at issue here, the court concluded that finding of competition by the Commission was proper even as to inferior quality imports which were not sold in every segment of the market because "there was sufficient evidence of overlap in the end-use market." Id. at 10, 678 F. Supp. at 902. If there is substantial evidence on the record which satisfies the "reasonable overlap" test, then it could reasonably be inferred that the competition inquiry of the Commission is more vigorous than "like product" analysis. The remaining question is whether substantial evidence on the whole record supports the Commission's determination. B. Substantiality of Evidence: 1. Standard of Review: The Court is required to uphold a Commission's determination which is supported by substantial evidence on the record as a whole. 19 U.S.C. § 1516a(b)(l)(B) (1982). Substantial evidence is relevant evidence that a "reasonable mind might accept as adequate to support a conclusion." Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984) (citing Consolidated Edison Co. v. NLRB, 305 U.5. 197, 229 (1938)). It is not within the Court's domain either to weigh the adequate quality or quantity of the evidence for sufficiency or to reject a finding on grounds of a differing interpretation of the record. Matsushita, 750 F.2d at 933 (citing Consolo v. Federal Maritime Comm'n, 383 U.5. 607, 619-20 (1966)). It is not sufficient, however, to merely examine the evidence that sustains the Commission's conclusion. Universal Camera Corp. v. NLRB 340 U.S. 474 (1951). The Court must consider all evidence in the record, including evidence which may weigh against the Commission's decision. Id. 2. Record and Reasonable Overlap Test: Plaintiff alleges that the Commission erroneously included Hungarian imports in the cumulation analysis because the record lacks sufficient evidence to support a finding of competition as to the Hungarian product. As stated, the Commission decided that the cu-mulation of high quality imported TRBs from Japan and Italy with low quality imported TRBs from Hungary, the PRC, Romania, and Yugoslavia was warranted because low quality "imports are able to compete with domestic production where extremely precise tolerance and longer life of the bearing are not as important." USITC Pub. 1983 at 14. The factual authority for the Commission's finding is replete with evidence of genuine gaps in quality between imported TRBs from the investigated Communist countries and domestic, Japanese, and Italian TRBs. The record lacks direct evidence of competition, however, between high and low quality TRBs in general, and between Hungarian and domestic TRBs in particular. The record authority on which the Commission relied to support this finding of competition chiefly consists of a discussion of description, uses, and methods of manufacture of TRBs. Id. at A-4, A-6, and A-8-A-9. This authority explains the nature of quality difference between high and low quality TRBs, including corroborating statements to this effect by certain importers, purchasers, and U.S. producers. Id. at A-54-A-57. Further, this authority states that, while few purchasers responded that Hungarian, Chinese, Romanian, Yugoslavian bearings are of the same quality, the results of laboratory tests confirm that qualitatively inferior TRBs from the investigated Communist countries cannot be sold for high-stress application. Id. at A-54. The specific data which the Commission cited as being supportive of its determination consist of two tables showing market penetration of imports from the investigated countries. See id. at A-20 and A-22. The utility of these tables, however, for purposes of deciding that the Hungarian TRBs compete with the domestic like product, is diminished because they do not offer separate statistics for imports from Hungary. Rather, these tables present a share of the low end of the market by already combined imports from Hungary, the PRC, Romania, and Yugoslavia, effectively buttressing a finding of competition with premature cumulative analysis. Defendants' explanation of the Commission's premature cumulative analysis of injury data from the investigated Communist countries reveals a fundamental flaw in the Commission's competition inquiry. Defendants explain that separate market penetration statistics for each source-country were not required because "where cu-mulation is appropriate, volume is to be considered on a cumulated basis without regard to whether imports from one country are independently a cause of material injury." Defendants' Memorandum in Opposition to Plaintiffs Motion for Judgment on the Agency Record of the U.S. International Trade Commission at 40 (Defendants' Memorandum) (citing USX Corp. v. United States, 11 CIT 82, 655 F. Supp. 487 at 492-93 (1987); USX Corp. v. United States, 12 CIT 205, 682 F. Supp. 60 (1988)). The problem with defendants' position is that, in effect, defendants have circumvented the proper order of injury analysis: decision as to appropriateness of cumulation analysis is subsequent, and not prior, to an affirmative finding of competition. Under the cumulation statute, a separate competition inquiry with respect to each country under investigation is a condition pre cedent to subjecting imports therefrom to cumulation analysis. Any other reading of the statute, such as defendants suggest, renders meaningless the standard for "competition," since imports from a source country will be subjected to cumulation analysis without a finding whether they "compete with [imports from other source countries] and with like products of the domestic industry in the United States market." 19 U.S.C. § 1677(7)(C)(iv). The evidence of overlap in sales that defendants proffer as justifying a finding of competition do not satisfy the "reasonable overlap" test. As stated above, there is no dispute that "the sales of [the low quality] bearings are restricted to the low-end, less-demanding segments of the tapered roller bearing market." USITC Pub. 1983 at A-54. It is also not challenged that low quality products are not produced domestically. Therefore, incidence of overlap in sales between high quality domestic TRBs and low quality imported TRBs consists of a few sales of Timken's products to customers whose needs could have been satisfied by cheaper lower quality TRBs. According to defendants, some purchasers "will pay a premium for Timken's bearings for various reasons. These include: (1) Timken's good customer relations and excellent reputation for quality product and a very extensive product line; (2) the fact that Timken's engineering services are in place; and (3) strong anti-import sentiment, particularly when the company has strong labor unions that have successfully refused to assemble imported bearings." Defendants' Memorandum at 35. Under the circumstances, these occasional sales that Timken is able to make based on these non-price reasons do not meet the "reasonable overlap" test, despite defendants' contrary assertions. For purposes of satisfying this test, it is not sufficient to merely establish that few isolated sales go to the same customers who are financially endowed enough to purchase premium-priced goods when adequate cheaper goods are available. The "reasonable overlap" test requires a separate finding, based upon specific facts, as to whether these sales are "reasonable" to warrant a finding of competition. In other words, the "reasonable overlap" test necessarily incorporates value and volume of a minimal extent as an implied factor of competition. While cumulation does not require a finding that imports from each country, considered alone, caused material injury, it must, however, "sufficiently implicate the product of each country in the general pattern of activity which is causing injury." Fundicao Tupy S.A v. United States, 12 CIT at 10, 678 F. Supp. at 902. Otherwise, an unfair situation may be created by elimination of specific causation finding with respect to unfairly traded imports from a single foreign country source at a time, that is, attributing injury to a source-country without adequate factual basis to that effect. In this connection, the record reveals that loss of U.S. market share occurred in four types of markets, namely, auto and auto related, truck-trailer, material handling, and aftermarket, but that the four prematurely cumulated countries of Hungary, China, Romania, and Yugoslavia are not in the first three of those markets at all. Administrative Record, Confidential Document 33 at A-28 and A-31 (showing, in undeleted form, the two tables appearing in USITC Pub. 1983 at A-20 and A-22). Additionally, plaintiff did not import the sets of bearings which make up the aftermarket. Id. at A-34. Similarly significant is the evidence that "[f]rom 1983 to 1986, the U.S. producers' share of the tapered roller bearing market declined 9.4 points by quantity and 6.5 points by value. During the same period, the share of the market accounted for by [unfairly traded TRBs from] Hungary, China, Romania and Yugoslavia collectively declined 0.1 percentage point by quantity (from 4.4 percent to 4.3 percent) and stayed exactly the same (1.1 percent) for the share of the market by value." USITC Pub. 1983 at A-52. In view of these facts, the present case is analogous to investigations in which the Commission declined to cumulate because the amount of overlap in sales was not "meaningful." For instance, the Commission concluded in one investigation that imports of certain carbon steel pipes and tubes from Canada, which are sold in an area isolated from where the sales of domestic goods take place, cannot be said to "meaningfully" compete, even if certain amount of overlap in sales occurs. See Certain Carbon Steel Pipes and Tubes From the People's Republic of China, the Philippines, and Singapore, USITC Pub. 1796 at 17. Defendants' warning against scrutiny of specific injury data in resolving the question of "competition" highlights the dilemma surrounding the applicability of cumulation. Defendants' concern is that such factual scrutiny amounts to circular reasoning: that each country under investigation have a separate causal link to the material injury suffered by the domestic industry. It hardly needs recitation that at the cumulation stage, it is inappropriate to impose the requirement that each country under investigation exhibits a contributory injurious effect. See, e.g., Fundicao Tupy S.A. v. United States, 12 CIT at 9, 678 F. Supp. at 901. As stated, however, an examination of specific facts of each investigation is central to the competition inquiry. The Commission recognized this point, as demonstrated by the Commission's numerous reference to two tables showing prematurely cumulated market penetration statistics as being supportive of a finding of competition. Competition, as defined by the Commission, is necessarily circumscribed at the outset of the analysis, precisely because it exists within the context of cumulation, where volume of imports plays a subordinate role, if at all. The general rule is that the Commission need not distinguish between imports of large and small magnitude in applying the cumulation statute. See LMI-LA Metalli Industri- ale, S.p.A. v. United States, 13 CIT 305, slip op. 89-46 (Apr. 11, 1989), appeal docketed, No. 89-1532 (Fed. Cir. June 16, 1989). As stated, however, the "reasonable overlap" test effectively incorporated into itself the causation rationale: the "reasonable overlap" test constitutes a safeguard against potential overextension or abuse of cumulation which would lead to imputing injury without any evidentiary basis. The purpose and goal of the statutory cumulation provision are compelling, and address the reality of modern day trade patterns, where dumping and subsequent injury to the domestic industry seldom manifest themselves as factors of a single country acting alone, but are rather the concerted result of simultaneous "cumulative" dumping of like products by several nations. See H.R. Rep. No. 725, 98th Cong., 2d Sess. 37, reprinted in 1984 U.S. Code Cong. & Admin. News 4910, 5164. But, inasmuch as injury causation cannot be a prerequisite for cumulation, individual causation cannot be imputed to each source-country under investigation because this necessarily leads to circular reasoning: justifying cumulation with affirmative injury determination. Therefore, to the extent protection of the domestic industry against what is a prevailing pattern of trade practices is a legitimate interest, the application of the cumulation provision must, as with the rest of the trade laws, be subjected to a balancing with equally compelling policy interests, namely, ensuring that in practice it does not evolve into an unduly restrictive trade measure. Similarly, while the Commission has wide latitude of discretionary authority in interpreting the standard "competition," this does not extend to applying such a low standard as to reduce it to a perfunctory exercise, thereby contravening the "reasonable overlap" test. Presently, the Court concludes that the Commission's finding that the Hungarian TRBs compete with domestic like products is not factually warranted because the "reasonable overlap" test is not satisfied. Conclusion For the foregoing reasons, the Court finds that the Commission's decision to cumulate the low quality Hungarian TRBs with high quality Japanese and Italian TRBs is without substantial evidence, and is not in accordance with the law. Therefore, the Court reverses the Commission's cumulative analysis and remands to the Commission to cumulate only those dumped TRBs which satisfy the "reasonable overlap" test. Since the unfairly traded Hungarian TRBs do not "compete" with their domestic counterparts, the Commission is directed to make traditional single country injury determination as to these imports. Tapered roller bearings are steel components used in machinery to counteract friction. When inserted between moving and stationary parts of machinery, the TRBs transmit the force generated by motion in the machinery from the moving parts to the stationary support. Two members of the Commission dissented from the decision of the Commission majority that the imports from the investigated Communist countries warranted cumulation. Therefore, the Commission minority concluded that the domestic tapered roller bearing industry is not materially injured, or threatened with material injury» by reason of less than fair value imports of TRBs from those countries. The final determinations of the Commission for Yugoslavia, Italy, and Japan are found in Inv. Nos. 731-TA-342 and 346 (Final), USITC Pub. 1999 (Aug. 1987), and Inv. No. 731-TA-343 (Final), USITC Pub. 2020 (Sept. 1987). The ITA published the following weighted-average dumping margins for the investigated countries: Hungary.7.42% PRC.97% Romania.8.70% Italy.124.75% Yugoslavia. 33.61% Japan . 47.05% to 70.44% See 52 Fed; Reg. 23,319 (June 19,1987); 52 Fed; Reg. 22,667 (June 15, 1987); 52 Fed; Reg. 23,320 (June 19,1987); 52 Fed. Reg. 30,417 (Aug; 14,1987); 52 Fed. Reg. 30,700, 30,709 (Aug. 17,1987). The Commission has interpreted this provision to additionally require that the subject imports must be marketed within a reasonably coincident time period. For a discussion of "subject to investigation," see Bingham & Taylor Div., Virginia Industries, Inc. v. United States, 815 F.2d 1482 (Fed. Cir. 1987); Chaparral Steel Co. v. United States, 12 CIT 873, 698 F. Supp. 254 (1988), appeal docketed, Nos. 89-1338 and 1339 (Fed. Cir. Mar. 14,1989). See Certain Brass Sheet and Strip From Brazil, Canada, and the Republic of Korea, Inv. No. 701-TA-269 (Final), USITC Pub. 1930 (Dec. 1986) at 12-13; see also Certain Carbon Steel Pipes and Tubes From the People's Republic of China, the Philippines, and Singapore, Inv. Nos. 731-TA-292-296 (Preliminary), USITC Pub. 1796 (Dec. 1985) at 10; Certain Welded Carbon Steel Pipes and Tubes From India, Taiwan, Turkey, and Yugoslavia, Inv. Nos. 701-TA-251-253 (Preliminary), USITC Pub. 1742 (Aug. 1985) at 12, n. 28. In these latter two investigations, the Commission considered, in addition to those factors enumerated above, whether the prices of imports and the domestic like product are within a reasonable range. A "like product" is a product that is "like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation." 19 U.S.C. § 1677(10) (1982). The competition test may be coextensive with 'like product" analysis in the preliminary phase of antidump-ing duty investigations. See American Grape Growers Alliance for Fair Trade v. United States, 9 CIT 396, 615 F. Supp. 603 (1985). Plaintiff further attacks the utility of these tables on the grounds that they do not show market penetration data for the Italian product. Since statistics for imported Italian TRBs were unavailable, the Commission was justified in adopting the "best information available" rule pursuant to 19 U.S.C. § 1677e(b) (1982 & Supp. IV 1986). Under the Omnibus Trade and Competitiveness Act of 1988, which applies to investigations initiated after August 23,1988, the Commission is not required to cumulate imports which are found to be de minimus. Omnibus Trade and Competitiveness Act of 1988, Pub. L. 100-418, § 1330(b), 102 Stat. 1107,1207 (1988).

7 C.M.A. 283

Opinion of the Court ROBERT E. QUINN, Chief Judge: A general court-martial convicted the accused of the wrongful use of marihuana, in violation of Article 134, Uniform Code of Military Justice, 50 USC § 728, and sentenced him to a dishonorable discharge, total forfeitures, and confinement at hard labor for one year. Intermediary appellate authorities affirmed the conviction. The accused then petitioned this Court for grant of review alleging a number of errors. We granted the petition on the question of whether the law officer erred during the trial, when, on his own motion, he excused a court member. In the course of a prosecution witness' testimony, Captain O'Neill, a court member, stated that he believed he sat as a court member on the trial of the witness for the use of marihuana on the same occasion as that alleged in regard to the accused. A check of the record of trial in the witness' case verified Captain O'Neill's belief. Thereupon, the law officer excused Captain O'Neill subject to objection by any member of the court. Defense counsel objected to this ruling. He argued that from "the tenor of the questions asked by Captain O'Neill . . . the defense would prefer that he . . . sit." However, no member of the court objected and the "challenged member" left the courtroom. No question exists as to the eligibility and impartiality of the court-martial members that convicted the accused. Moreover, the Government and the accused agree that neither party has a right to a particular court member, but that both are entitled to impartial mem bers. United States v Carver, 6 USCMA 258, 19 CMR 884; United States v Deain, 5 USCMA 44, 17 CMR 44. The accused contends, however, that the law officer could not legally excuse Captain O'Neill on his own motion. Article 29(a) of the Uniform Code of Military Justice, 50 USC § 593, provides generally that a court member shall not be excused after arraignment except "as a result of a challenge." A court member who participated in the trial of a closely related case is subject to challenge for cause. Manual for Courts-Martial, United States, 1951, paragraph 62/(13). It is apparent, therefore, that the law officer excused Captain O'Neill on the basis of challenge. The fact that he ruled on the challenge subject to objection by a court member was error. However, there is no claim, and we discern no likelihood, .that this aspect of the procedure improperly influenced the remaining court members or prejudiced the accused in any substantial right. This error, therefore, may be disregarded. United States v Shaffer, 2 USCMA 75, 6 CMR 75. Discussing the right of challenge, paragraph 62 of the Manual provides, in part, that "Members of a general or special court-martial . . . may be challenged by the accused or the trial counsel for cause stated to the court." The Manual further points out that if the challenge is on one of the first eight grounds specified in paragraph 62/, and the fact is admitted, or it is "manifest" that the challenge will be unanimously sustained, the member "will be excused forthwith unless objection or question is made or raised." The discussion itself does not indicate who excuses the disqualified member. However, the Manual's guide to trial procedure indicates that in such cases the law officer "may excuse the challenged person 'subject to the objection of any member.' " Appendix 8a, page 506. I regard this provision as a proper supplement to the procedure for a contested challenge. When it is "manifest" that the court member must be excused, it should be unnecessary for the court to engage in the "empty ritual" of taking a formal vote to determine the validity of the challenge. See United States v Walker, 1 USCMA 580, 584, 5 CMR 8. But a majority of the Court are of the opinion that the trial guide procedure is contrary to the provisions of Articles 41 and 51, Uniform Code of Military Justice, 50 USC § 616 and § 626. In their view, the challenged member can be excused only after a vote by the court, in accordance with the procedure set out in Articles 51(a) and 52, supra. This conclusion, however, does not necessarily deprive the law officer of the right to originate a challenge. The Manual provision does not preclude the law officer from exercising the right to challenge. The language is permissive, not mandatory. United States v Knudson, 4 USCMA 587, 591, 16 CMR 161. Moreover, no provision in the Uniform Code prohibits such action. Nor does the Code prohibit the law officer from instructing the court members on the law relating to challenge. Under these circumstances, the trial practice in the Federal criminal courts as to both the persons who may challenge and the time of challenge is an appropriate guide for the practice in courts-martial. United States v Fisher, 4 USCMA 152, 15 CMR 152. In United States v Benson, 31 Fed 896 (D Calif), page 900, the court pointed out that Federal judges have the "power, and it is their duty, to exercise it . on their own motion . . . to enforce any other objections to jurors which . . . would necessarily unfit them to act." Ordinarily, the power to challenge is exer- cised on initial voir dire, but it can also be exercised during the trial whenever the need becomes apparent if alternate jurors have been appointed so that the number of remaining jurors is not reduced below that required by law. Rule 24 (c), Federal Rules of Criminal Procedure. We conclude, therefore, that the law officer is authorized to challenge a court member for cause on his motion, either during the regular challenge procedure or during the trial. The decision of the board of review is affirmed. Judges LatimeR and FeRguson concur.

568 U.S. 1137

C. A. 6th Cir. Certiorari denied.

526 U.S. 1058

C. A. 11th Cir. Cer-tiorari denied.

401 U.S. 992

C. A. 5th Cir. Certiorari granted.

400 U.S. 851

C. A; 5th Cir. Certiorari denied. Mr. Justice Douglas is of the opinion that certiorari should be granted.

2 B.T.A. 614

This appeal is from the determination of a deficiency in income and profits taxes in the amount of $1,188.18 for 1919 and 1920. It is based upon the action of the Commissioner in disallowing the value of good will acquired for stock claimed by the taxpayer in its invested capital for those years. FINDINGS OF FACT. 1. The taxpayer is a California corporation, having its principal place of business at Oakland. It was organized in 1907 for the purpose of taking over the business of two existing corporations, to wit, the Oakland Towel Co. and the California Towel Co. It acquired the assets and good will of these two companies for 49,996 shares of its capital stock of the par value of $1 per share. Both of the former corporations were going concerns at the time of the transfer. They were engaged in the business of supplying towels to offices, barber shops, hair-dressing parlors, and places of that kind and had a regular clientele. 2. The books of the two businesses taken over have been destroyed and there was no evidence as to what their respective earnings were, nor was there any evidence as to the net tangible assets used in the former businesses. 3. In March, 1908, an employee subscribed for 600 shares of stock and agreed to pay $1.50 per share and to have a certain part of his wages retained by the company over a long period of time, to wit, from March, 1908, until May, 1910, to pay for such stock. DECISION. The determination of the Commissioner is approved. Aeundell not participating.

429 U.S. 1076

Sup. Ct. Colo. Certiorari denied.

220 U.S. 611

Petition for a writ of certiorari to the United States Circuit Court of Appeals for the Third Circuit denied.

546 U.S. 1089

C. A. 5th Cir. Certio-rari denied.

16 T.C. 432

OPINION. Oppek, Judge: The single factual issue requires purely a determination of the proportion oi premium coupons issued by petitioner with its cigarettes during the years in question which would eventually be presented for redemption. This determination has been made by our ultimate finding of fact. The question arises because of the ac- countings system which respondent's regulations impose upon those who, like petitioner, issue trading stamps or redeemable coupons with their products. The requirement is that "he should in computing the income from such sales subtract only the amount which will be required for the redemption of such part of the total issue of trading stamps or premium coupons issued during the taxable year as- will eventually be presented for redemption." Neither party attacks the regulation and, since there is no dispute as to the cost of redemption per coupon, both approach the controversy as involving "reasonable expectation" of the proportion of the coupons issued in a given year which will eventually be redeemed. It is on that presentation of the issue that our conclusion rests. The proceeding was, by agreement of the parties, heard before a Commissioner of the Tax Court in accordance with Internal Revenue Code, section 1114, and Rule 48 of our Rules of Practice. It is in fact the first tax case to be so treated. See Bibb Manufacturing Co., 12 T. C. 665. In conformity with the procedure envisaged by the rule, the Commissioner prepared detailed proposed findings, to which the parties were permitted to file exceptions. Careful consideration has been given to the proposed findings, to the exceptions and arguments of the parties, and to the record as a whole. After such study, we are satisfied that the proposed findings of the Commissioner accord with the facts as they appear from the record, and the proposed findings have hence been adopted in full. All other issues have been or will be disposed of by stipulation of the parties. Eeviéwed by the Court. Decision will be entered wider Rule 50. Regulations 111: Sec. 29.42-5. Subtraction for Redemption of Trading Stamps.— If a taxpayer, for the purpose of promoting his business, issues with sales trading stamps or premium coupons redeemable in merchandise or cash, he should in computing the income from such sales subtract only the amount which will be required for the redemption of such part of the total issue of trading stamps or premium coupons issued during the taxable year as will eventually be presented for redemption. This amount will be determined in the light of the experience of the taxpayer in his particular business and of other users of trading stamps or premium coupons engaged in similar businesses. The taxpayer shall file for each of the five preceding years, or such number of these years as stamps or coupons have been Issued by him, a statement showing— (a) The total issue of stamps during each year; (b) The total stamps redeemed in each year; and (c) The rate, in percentage, which the stamps redeemed in each year bear to the total stamps issued in such year, regardless of the year when such redeemed stamps were issued. A similar statement shall also be presented showing the experience of other users of stamps or coupons whose experience is relied upon by the taxpayer to determine the amount to be subtracted from the proceeds of sales. The Commissioner will examine the basis used in each return, and in any case in which the amount subtracted in respect of such stamps or coupons is found to be excessive, appropriate adjustment will be made. See United States v. O. J. Morrison Stores of Fairmont (CCA-4), 99 Fed. (2d) 77. Petitioner's exceptions request that an ultimate finding "mate it clear that the percentages found by the Court are the percentages of the coupons issued in each of the years 1940-1943, inclusive, which would reasonably be expected eventually to be redeemed," and respondent's brief states: "the following percentages of coupons issued in each respective year here involved can be reasonably expected to be redeemed(Emphasis added.) RULE 48. — COMMISSIONERS OF THE TAX COURT. (a) The term "commissioner" as used in this Rule 48 applies to any attorney on the legal staff of this Court who shall have been designated by the Chief Judge a» a "commissioned in a particular case" pursuant to Section 1114 of the Internal Revenue Code . See "Tax Court Commissioners," by Edward N. Polisher, Taxes, May 1950, 418.

12 Ct. Int'l Trade 685

Memorandum Opinion and Order Restani, Judge: Plaintiffs have moved for a preliminary injunction staying liquidation in this countervailing duty matter, as they have in a separate antidumping matter, so that this court's final decision resolving the challenge to the administrative determination will have full effect. See 19 U.S.C. § 1516a(c)(2) and (e) (1982). Plaintiffs' motion has been granted with respect to the antidumping case. IPSCO, Inc. v. United States, 12 CIT 676, Slip Op. 88-97 (July 21, 1988). The court finds that this case does not warrent a different result. Plaintiffs' and defendant's positions in this case are identical to their positions in the antidumping duty case. Although this action concerns countervailing duties, rather than antidumping duties, the parties have not suggested that this difference has any bearing on the particular issues currently before the court. Furthermore, the parties do not argue that there are any factual distinctions between the two cases which would warrant different outcomes. The court's previous discussion and analysis of authorities in the antidumping case applies analogously, if not directly, in this case. With respect to the court's jurisdiction to provide the relief requested, the statutory scheme does not warrant different results depending upon whether the challenged determination arises under countervailing or antidumping law. The situation which plaintiffs are confronted with is identical. They seek an injunction in this judicial challenge to a final affirmative determination. No administrative review of that determination has been conducted, and none will ever be conducted for the first annual review period. Entries covered by that first annual review period may be liquidated in accordance with the cash deposit rate established in the currently challenged determination. If injunction is not granted in this case, plaintiffs' statutory right to obtain judicial review is likely to be without meaning for the entries permanently affected by the determination under review. See Zenith Radio Corp. v. United States, 710 F.2d 806, 810 (Fed. Cir. 1983). In this case the court finds that under post-1984 law, absent an injunction in this action there will be irreparable harm to plaintiffs because of the combination of unchallengeable liquidation of their past entries, loss of meaningfull opportunity for judicial review as to such entries, and the requirement of filing annual reviews merely to obtain injunctive relief. Slip Op. 88-97 at 18. Finally, the four-part test is similarly satisfied in this case. The court has already found Ipsco's challenge in this countervailing duty case to have merit. Ipsco, Inc. v. United States, 12 CIT 359, Slip Op. 88-54 (May 4, 1988). On the one hand, if the stay is not granted only plaintiffs will suffer harm if the stay is not granted, while on the other hand, if the stay is granted defendant will lose nothing. As indicated in the court's discussion of the statutory scheme in its previous opinion, injunctive relief is consistent with public policy. The parties shall consult and plaintiffs shall submit a proposed preliminary injunction order within 10 days. Plaintiffs acknowledge that no request for a 751 review was made with respect to this countervailing duty case, whereas in the antidumping case, a request was made and withdrawn. Neither party makes anything of this distinction.

435 U.S. 1007

C. A. 10th Cir. Certiorari denied.

1 Cust. Ct. 412

Opinion by Keefe, J. In accordance with stipulation of counsel and on the authority of Locatelli v. United States (T. D. 48284 and T. D. 49389) the protests were sustained.

36 Cust. Ct. 378

Opinion by Wilson, J. In accordance with stipulation of counsel that the merchandise consists of reptile skins similar in all material respects to those the subject of Fleming-Joffe, Ltd. v. United States (25 Cust. Ct. 56, C. D. 1263), the claim of the plaintiff was sustained.