THOMAS FREYTAG, ET AL., PETITIONERS V. COMMISSIONER OF INTERNAL
REVENUE

   No. 90-762

   In The Supreme Court Of The United States

   October Term, 1990

   On Writ Of Certiorari To The United States Court Of Appeals For The
Fifth Circuit

   Brief For The Respondent

            TABLE OF CONTENTS
   Questions Presented
   Opinions below
   Jurisdiction
   Constitutional and statutory provisions involved
   Statement
   Summary of argument
   Argument:
     I. 26 U.S.C. 7443A(b)(4) authorized the chief
        judge of the Tax Court to assign petitioners'
        cases to a special trial judge
    II. Petitioners waived any right to challenge the
        appointment of the special trial judge in their
        case by consenting to have their cases heard by
        the special trial judge
   III. The Tax Court chief judge's appointment of the
        special trial judge who heard petitioners' cases
        did not violate the Appointments Clause
        A. A special trial judge assigned under 26
           U.S.C. 7443A(b)(4) performs duties that
           may be performed by an employee not subject
           to the Appointments Clause
        B. If special trial judges are Officers, they are
           inferior Officers whom the Tax Court chief
           judge, as "Head() of Department()," may
           appoint
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals, Pet. App. A1-A13, is reported
at 904 F.2d 1011.  The opinion of the United States Tax Court, Pet.
App. A14-A69, is reported at 89 T.C. 849.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 6, 1990.
A petition for rehearing was denied for August 15, 1990.  Pet. App.
A97-A98.  The petition for a writ of certiorari was filed on November
13, 1990, and granted on January 22, 1991.  The jurisdiction of this
Court is invoked under 28 U.S.C. 1254(1).

           CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

   Pertinent constitutional and statutory provisions are reprinted in
an Appendix to this brief.

                          QUESTIONS PRESENTED

   1. Whether a special trial judge of the Tax Court could be assigned
to hear and report on petitioners' cases under 26 U.S.C. 7443A(b)(4).

   2. Whether petitioners' consent to have their cases heard by a
special trial judge waived their right to challenge his appointment on
the basis of the Appointments Clause, Art. II, Section 2, Cl. 2.

   3. Whether the duties of a special trial judge in hearing and
reporting on a case may be performed only by an "Officer of the United
States," and, if so, whether the appointment of special trial judges
by the chief judge of the Tax Court, in accordance with 26 U.S.C.
7443A, satisfies the requirements of the Appointments Clause.

                               STATEMENT

   Petitioners attempted to deduct on their income tax returns large
"losses" supposedly incurred as a result of their participation in a
tax shelter scheme.  When the Commissioner of Internal Revenue
disallowed those deductions, petitioners filed petitions in the Tax
Court.  Trial began before a regular judge of the Tax Court, /1/ but
that judge became ill shortly after trial began.  A special trial
judge /2/ was assigned to complete the trial, which was videotaped so
that the regular judge could view the testimony and ultimately render
the decisions.

   After all the evidence was taken, however, the regular judge became
too ill to decide the cases, and he retired as an active judge.
Petitioners then consented to having the special trial judge prepare
findings and a proposed opinion to enable another regular judge of the
Tax Court to decide their cases.  J.A. 8-9, 13-14.  The special trial
judge's report proposed findings that the tax shelter in which
petitioners participated was a sham and that petitioners entered into
the shelter primarily to avoid payment of income taxes.  Pet. App.
A47.  The chief judge of the Tax Court adopted the special trial
judge's report and entered decisions in favor of the Commissioner.
Id. at A14.  The court of appeals affirmed.  Id. at A1-A13.

   1. Each of the petitioners invested in a commodity tax straddle
program operated by First Western Government Securities (First
Western).  Stated simply, petitioners informed First Western how much
tax loss they wished to secure and First Western charged petitioners
fees of 7 to 8% of the desired losses.  The fees supposedly were paid
for contracts to take or deliver Government mortgage-backed securities
approximately 14 to 22 months in the future.  In fact, no market in
those securities existed so far in the future and no securites were
ever delivered.  Instead, First Western created investment portfolios
on a computer in which petitioners would simultaneously contract to
buy securities at some future date (the "long" leg of the straddle)
and sell similar securities at another future date (the "short" leg of
the straddle).  If permitted by the Internal Revenue Code, the
straddle scheme would have allowed petitioners to "cancel" the loss
leg and deduct the loss against that year's ordinary income, while at
the same time holding open the gain leg until it could be closed out
in a later year, as an offsetting transaction involving a "sale or
exchange," 26 U.S.C. 1221, thereby deferring recognition of income and
reporting that income as capital gain.  Pet. App. A3-A5, A8-A9,
A14-A15, A19 n.6, A26.

   2. The Commissioner disallowed the "loss" deductions claimed by
petitioners with respect to their "investments" in First Western, and
they, along with some 3,000 other participants in that scheme,
petitioned the United States Tax Court for a redetermination of the
resulting deficiencies.  Petitioners' cases, together with six others,
were chosen as test cases and consolidated for trial.  Pet. App.
A5-A6.

   Trial commenced in December of 1984 before the Honorable Richard C.
Wilbur, a regular judge of the Tax Court.  Judge Wilbur became ill
shortly after the trial began.  Chief Judge Samuel B. Sterrett
thereupon assigned the cases to Special Trial Judge Carleton D. Powell
to conduct the remainder of the evidentiary proceedings.  Those
proceedings were videotaped so that Judge Wilbur could view the
testimony, prepare a report, and render the decisions when he
recovered his health.  None of the petitioners objected to this
assignment.  Pet. App. A5-A6.

   After all the evidence was taken, Judge Wilbur learned that his
medical condition would not allow him to prepare the report in
petitioners' cases.  /3/ By order dated July 23, 1986, Chief Judge
Sterrett notified the parties that -- unless they objected -- he would
assign Special Trial Judge Powell to prepare the report in their cases
in accordance with 26 U.S.C. 7443A(b)(4), and that action on the
report would be taken "by Judge Wilbur, or if not by this Division of
the Court." /4/ J.A. 9.  One taxpayer (Wilhide, Inc.) objected to the
assignment, J.A. 4, and its case was severed, Pet. App. A27 n.16;
J.A. 6.  The remaining test case taxpayers, including petitioners,
agreed to the assignment on the understanding that Judge Wilbur or
Chief Judge Sterrett would review Special Trial Judge Powell's report
and make the decision of the Tax Court.  J.A. 10-11;  see 26 U.S.C.
7443A(c).

   The special trial judge's report recommended that petitioners'
deductions not be allowed.  He proposed findings that "(t)he
transactions between First Western and its customers were illusory and
fictitious" and were "entered into primarily, if not solely, for
tax-avoidance purposes." Pet. App. A47.  His report described a tax
shelter scheme in which First Western's ability to "control() losses"
through its computer system was so "fine(ly)-tune(d)" that it could
"reach any result" its clients desired.  Id. at A50.  The
computer-created "market" in which petitioners "invested" was so
artificial that it "could not have existed if there had been any real
economic substance to its program." Id. at A54.  In reality, "First
Western's world consisted of a computer spitting out paper showing
huge transactions that had no economic significance except in
petitioners' attempts to raid Federal and State fiscs." Ibid.  The
report also concluded that petitioners could be sanctioned under 26
U.S.C. 6673 because their litigating position was "frivolous";  rather
than recommending the imposition of such sanctions, however, the
report proposed only to warn other participants in the First Western
scheme that petitioners' cases would be "the last free bites of that
apple." Pet. App. A64.

   The special trial judge's report was reviewed by Chief Judge
Sterrett, who, on October 21, 1987, entered an order adopting the
special trial judge's proposed findings and opinion and holding that
petitioners' straddle transactions with First Western were shams and,
in the alternative, that petitioners were not entitled to loss
deductions because they had not entered into the transactions
primarily for profit.  Decisions were subsequently entered in favor of
the Commissioner in accordance with that opinion by Judge Sterrett's
successor as chief judge of the Tax Court, the Honorable Arthur L.
Nims, III.  Pet. App. A6, A14, A47-A65.

   3. Petitioners appealed on the grounds that the Tax Court erred in
finding that the transactions they entered into with First Western
were shams, and that they had not intended to make a profit.  /5/ For
the first time, petitioners also argued that the assignment of their
cases to the special trial judge was unlawful.  They contended that 26
U.S.C. 7443A(b)(4) allows special trial judges to hear and file
reports only in minor tax cases.  In addition, they contended that
appointment of special trial judges by the chief judge of the Tax
Court, as authorized by 26 U.S.C. 7443A(a), violates the Appointments
Clause of the Constitution, Art. II, Section 2, Cl. 2.  Pet. App.
A7-A9 & n.9, A11 n.11.

   The court of appeals affirmed the Tax Court's decisions in all
respects.  It held that 26 U.S.C. 7443A(b)(4) authorized assignment of
petitioners' cases to a special trial judge for hearing and report,
noting that the statute and the Tax Court's procedures require a
regular judge of the Tax Court to "control() the outcome of the case."
Pet. App. A7 n.8.  The court further held that by consenting to the
assignment, petitioners waived any objection they might have raised
under the Appointments Clause.  Id. at A8 n.9.  Given this conclusion,
the court found it unnecessary to rule on the merits of petitioners'
Appointments Clause challenge.

   On the deductibility of petitioners' claimed tax shelter "losses,"
the court of appeals held that the Tax Court "could not help but"
conclude that the First Western transaction were shams, Pet. App. A8,
and that it was "ludicrous to suggest that these petitioners had
anything but a most fleeting interest in a potential economic gain"
with respect to those transactions, id. at A11 n.11.  Accordingly, the
court affirmed the disallowance of petitioners' deductions.

                          SUMMARY OF ARGUMENT

   1. Assignment of petitioners' cases to a special trial judge is
authorized by the unambiguous language of 26 U.S.C. 7443A.  That
Section authorizes the chief judge of the Tax Court to assign a
special trial judge to hear and decide three categories of cases
(declaratory judgment proceedings, small cases under 26 U.S.C. 7463,
and other small cases), and to hear, but not decide, "any other
proceeding" in the Tax Court.  The legislative history confirms that
Congress intended the statutory phrase "any other proceeding" in 26
U.S.C. 7443A(b)(4) to mean that "any other proceeding" may be assigned
to a special trial judge for hearing and preparation of proposed
findings and opinion.  See 1 H.R. Rep. No. 432, 98th Cong., 1st Sess.
266 (1983).

   This authority is not new, and it is not limited to cases that are
"minor" or lack "wide-ranging effect." Pet. Br. 18, 23.  Statutory
authority to assign a special trial judge (or "commissioner" as they
formerly were called) to hear (but not decide) any case within the
jurisdiction of the Tax Court has existed since 1943.  The chief judge
frequently assigned large and complex cases to special trial judges on
that authority before 1984.  Consequently, when Congress adopted the
"any other proceeding" provision in 1984, it codified special trial
judges' authority to hear and report on any case within the Tax
Court's jurisdiction.

   2. Petitioners waived their right to challenge the special trial
judge's appointment by giving their express consent to the chief
judge's assignment of a special trial judge to hear and report on
their cases.  Application of the waiver rule in this case serves both
to promote judicial economy and to prevent a party from waiting to
raise objections that do not go to the merits until after he has lost
his case on the merits.

   Petitioners seek to avoid this basic rule by claiming that
separation of powers challenges cannot be waived, and that this Court
must therefore entertain their Appointments Clause claim despite their
express consent below.  This Court's prior decisions, however, have
declined to enforce waivers only when the structural interests of the
Article III Judiciary have been at stake.  See CFTC v. Schor, 478 U.S.
833, 850-851 (1986);  Glidden Co. v. Zdanok, 370 U.S. 530, 535-537
(1962);  Lamar v. United States, 241 U.S. 103, 117-118 (1916).  That
is because litigants cannot be assumed to protect the institutional
interests of the Judiciary.  Schor, 478 U.S. at 850-851.  That
rationale is clearly inapplicable to petitioners' particular
Appointments Clause challenge, which is based on a constitutional
provision safeguarding the prerogatives of the Executive that the
Executive can be expected to invoke and will be in a position to
invoke in every tax case.

   3. A. The duties performed by special trial judges assigned cases
under 26 U.S.C. 7443A(b)(4) need not be performed by Officers of the
United States.  Like a special master assigned by an Article III
court, a special trial judge assigned under Section 7443A(b)(4) acts
only as an aide to a judge of the Tax Court, who retains ultimate
responsibility for making findings and entering the opinion and
decision for the courrt.  Unlike assignments under Section
7443A(b)(1)-(3) -- where the special trial judge may be authorized to
make the decision for the Tax Court -- special trial judges in cases
assigned under Section 7443A(b)(4) may only hear evidence and prepare
proposed findings and opinions.  Thus, the special trial judges in
cases like these merely assist the judges of the Tax Court in
discharging their ultimate responsibility to decide the cases.  As
assistants to Tax Court judges, special trial judges do not themselves
exercise significant governmental authority and therefore are not
"Officers of the United States" subject to the Appointments Clause.

   B. If the duties performed by special trial judges in cases under
26 U.S.C. 7443A(b)(4) must be performed by Officers of the United
States, their appointment by the chief judge satisfies the
Appointments Clause.  Special trial judges are at most "inferior"
Officers of the United States, and, accordingly, Congress may vest
power to appoint them "in the President alone, in the Courts of Law,
or in the Heads of Departments." Art. II, Section 2, Cl. 2.  The
answer to the question whether the Tax Court is included within the
phrase "the Courts of Law" or the term "Departments," as those words
are used in the Appointments Clause, turns on the status of the Tax
Court within our tripartite system of separated powers.  The Tax Court
cannot exist in some headless fourth branch of government;  it must be
in the Legislative, Judicial, or Executive Branches established by the
Constitution.  Given its functions and the manner in which it
discharges them, the Tax Court plainly cannot be in the Legislative
Branch.  See INS v. Chadha, 462 U.S. 919, 951 (1983).  Given the Tax
Court judges' lack of lifetime tenure and salary protection, the Tax
Court plainly cannot be in the Judicial Branch.  See U.S. Const. Art.
III, Section 1;  Glidden, 370 U.S. at 552 (plurality opinion).  It
therefore resides in the Executive Branch.

   For the 45 years prior to 1969, the Tax Court was expressly
designated by Congress as an agency within the Executive Branch.
Although Congress established the Tax Court as a "court of record"
under "article I of the Constitution" in 1969, its function, and the
manner in which it performs that function, did not change.  Nothing in
the terms of the 1969 legislation purported to remove the Tax Court
from the Executive Branch or to incorporate it into either the
Legislative or Judicial Branches.  It therefore remains an Executive
Branch agency.  The chief judge, as the "Head()" of the "Department()"
called the Tax Court, may constitutionally be vested with authority to
appoint "inferior Officers" of the United States.

   This conclusion is faithful to the important constitutional purpose
served by the Appointments Clause.  That Clause -- together with the
Incompatibility Clause, Art. I, Section 6, Cl. 2 -- embodies the basic
departure of the Framers from the British Parliamentary system.  The
Appointments Clause ensures that the Legislative Branch will not
intrude on executive or judicial functions by affecting the
appointments process, beyond the constitutional role of advice and
consent.  Under the Clause, appointment authority can be vested by
Congress only in the other two Branches, each of which possesses
constitutional powers and prerogatives sufficient to withstand
congressional efforts to affect particular appointments.  Thus, "the
Courts of Law" are limited to the Article III Judiciary (and do not
include the Tax Court), because the Article III Judiciary can rely on
life tenure and salary protection to resist legislative encroachment.
And "Departments" is limited to Executive Branch Departments,
protected from such encroachment by the various constitutional powers
of the Chief Executive.  Were the Tax Court not in the Executive
Branch and therefore outside the scope of those protections, it would
be subject to precisely the sort of congressional interference in the
appointments process that the Appointments Clause was designed to
forestall.  Because it is an Executive Branch Department, however, its
"Head()" may be vested with appointment authority under the terms of
that Clause.

                               ARGUMENT

   I. 26 U.S.C. 7443A(b)(4) AUTHORIZED THE CHIEF JUDGE OF THE TAX
COURT TO ASSIGN PETITIONERS' CASES TO A SPECIAL TRIAL JUDGE

   A. Section 7443A(b) of the Internal Revenue Code (26 U.S.C.)
authorizes the chief judge of the Tax Court to assign four categories
of cases to special trial judges:  (1) "any declaratory judgment
proceeding," 26 U.S.C. 7443A(b)(1);  (2) "any proceeding" under 26
U.S.C. 7463 (whose informal procedures are available at the taxpayer's
election in cases involving less than $10,000), 26 U.S.C. 7443A(b)(2);
 (3) "any proceeding" in which the deficiency or claimed overpayment
does not exceed $10,000, 26 U.S.C. 7443A(b)(3);  and (4) "any other
proceeding which the chief judge may designate," 26 U.S.C.
7443A(b)(4).  In the first three categories, the chief judge may
assign the special trial judge not only to hear and report on a case
but also to decide it.  26 U.S.C. 7443A(c).  In the fourth category,
the chief judge may only authorize the special trial judge to hear the
case and prepare a report.  The case must be decided by a regular
judge of the Tax Court.  26 U.S.C. 7443A(c).

   The chief judge's assignment of petitioners' cases to a special
trial judge is authorized by the plain language of 26 U.S.C.
7443A(b)(4).  Petitioners acknowledge as much;  their objection is
that "(t)he court of appeals read this language literally." Pet. Br.
12.  Subsection (b)(4) permits the chief judge to assign "any other
proceeding" (than the ones listed in subsections (1) through (3)) "to
be heard by the special trial judges of the court." Subsection (b)(4)
is unambiguous.  Its text contains no limiting term of the sort
petitioners would imply that restricts its reach to cases that are
"minor" or lack "wide-ranging effect." Pet. Br. 18, 23.  See Business
Guides, Inc. v. Chromatic Communications Enters., Inc., 111 S. Ct.
922, 928 (1991) ("(O)ur inquiry is complete if we find the text * * *
to be clear and unambiguous.");  Pavelic & LeFlore v. Marvel
Entertainment Group, 110 S. Ct. 456, 460 (1989) ("Our task is to apply
the text, not to improve it.");  Hallstrom v. Tillamook County, 110 S.
Ct. 304, 309 (1989) (Courts "are not at liberty to create an exception
where Congress has declined to do so.").

   The legislative history confirms that the statutory text means what
it says, and that the chief judge may assign "any other proceeding"
within the Tax Court's jurisdiction to special trial judges.  In
proposing to amend former 26 U.S.C. 7456(d) (now Section 7443A) to
provide expressly for this category of assignments, the House Report
stated that its purpose was "to clarify" that any other proceeding
could be assigned to special trial judges "so long as a Tax Court
judge must enter the decision." 1 H.R. Rep. No. 432, 98th Cong., 1st
Sess. 266 (1983).  The House Report explains:

      A technical change is made to allow the Chief Judge of the Tax
      Court to assign any proceeding to a special trial judge for
      hearing and to write proposed opinions, subject to review and
      final decision by a Tax Court judge, regardless of the amount in
      issue.  However, special trial judges will not be authorized to
      enter decisions in this latter category of cases.

Ibid. (emphasis added).  The Conference Report "follows the House
bill." H.R. Conf. Rep. No. 861, 98th Cong., 2d Sess. 1127 (1984).

   B. The 1984 amendment was regarded as "technical" in light of the
historical development of the special trial judges' role.  As we
describe in detail below, that history demonstrates that Congress has
never restricted the chief judge's authority to assign special trial
judges to hear (but not decide) cases to any particular subset of the
Tax Court's jurisdiction.  To the contrary, special trial judges and
their predecessors -- known as commissioners -- have been authorized
for almost half a century to hear any cases before the Tax Court in
the discretion of its chief judge.  In practice, special trial judges
frequently heard and reported on large and complex cases before 1984.
Accordingly, when Congress adopted subsection (b)(4) in 1984, it
codified the chief judge's discretion to assign cases just like
petitioners' to a special trial judge for hearing and preparation of a
report.  See, e.g., Midlantic Nat'l Bank v. New Jersey Dep't of Envtl.
Protection, 474 U.S. 494, 501 (1986) ("(T)he normal rule of statutory
construction is that if Congress intends for legislation to change the
interpretation of a judicially created concept, it makes that intent
specific.").

   In contrast, Congress has limited the authority of special trial
judges to enter decisions to narrow categories of cases from the
origin of that power in 1974.  Congress's expansion of special trial
judge's authority to hear and decide cases may well have been
"measured (and) incremental." Pet. Br. 19-20.  The accuracy of that
observation, however, has no bearing on the scope of cases that
special trial judges can hear but not decide.  The authority in that
category of cases has not changed since 1943.

   Congress first conferred authority to employ what we now call
special trial judges when it authorized the chief judge of the Tax
Court "from time to time by written order (to) designate an attorney
from the legal staff of the court to act as a commissioner in a
particular case * * * (to) proceed under such rules and regulations as
may be promulgated by the Tax Court." Section 1114 of the Internal
Revenue Code of 1939, as amended by Section 503 of the Revenue Act of
1943, ch. 63, 58 Stat. 72;  see H.R. Rep. No. 871, 78th Cong., 1st
Sess. 71-72 (1943).  The statute did not restrict the types of
proceedings in which commissioners could be used.  /6/ That authority
was continued, without substantial change, in Section 7456(c) of the
1954 Code, as originally enacted.  In 1969, Congress amended that
provision to provide for appointment of full-time commissioners,
serving for indefinite terms, who were to "proceed under such rules
and regulations as may be promulgated by the court." Section 7456(c),
amended by Tax Reform Act of 1969, Pub. L. No. 91-172, Section 958, 83
Stat. 734.  Section 502(a)(2)(A) of the 1969 Act (83 Stat. 630) also
created an elective, streamlined procedure for small tax cases, /7/
but it did not restrict the use of commissioners to such cases.

   More than 30 years after commissioners were authorized to hear and
report on cases pending before the Tax Court, Congress for the first
time authorized the Tax Court to permit commissioners to decide a
case.  In 1974, Congress enacted provisions permitting the maintenance
of declaratory judgment actions in cases relating to the qualification
of certain retirement plans, and authorized the chief judge of the Tax
Court, in his discretion, to permit commissioners to hear and make the
decisions of the court in such cases.  Employee Retirement Income
Security Act of 1974, Pub. L. No. 93-406, Section 1041(a), 88 Stat.
949 (codified at 26 U.S.C. 7456(c)).  In 1978, Congress amended 26
U.S.C. 7456(c) to expand the Tax Court's authority to allow
commissioners to make decisions in declaratory judgment proceedings,
and added 26 U.S.C. 7463(g), providing the same authority in the case
of small tax proceedings under that Section.  Revenue Act of 1978,
Pub. L. No. 95-600, Sections 336(b)(1), 502(b), 92 Stat. 2841-2842,
2879.  After further expansion, the provisions allowing entry of
decision by commissioners were redesignated in 1982 as 26 U.S.C.
7456(d), and encompassed all three categories now set forth in 26
U.S.C. 7443A(b)(1)-(3).  Miscellaneous Revenue Act of 1982, Pub. L.
No. 97-362, Section 106(c)(1), 96 Stat. 1730.

   While Congress was expanding the authority of commissioners to hear
and decide cases, their employment in the traditional task of hearing
cases had expanded dramatically.  Chief judges assigned commissioners
to hear the full spectrum of Tax Court cases, including complex cases
and cases involving lengthy trials.  /8/ The provisions governing the
assignment of special trial judges took essentially their present form
in 1984, when Congress changed the term "commissioner" to "special
trial judge" and added to 26 U.S.C. 7456(d) the provision
corresponding to present 26 U.S.C. 7443A(b)(4).  Tax Reform Act of
1984, Pub. L. No. 98-369, Section 463(a), 98 Stat. 824.  In 1986, the
provisions of former Section 7456(c) and (d) were moved, without
substantial change, to new Section 7443A.  Tax Reform Act of 1986,
Pub. L. No. 99-514, Section 1556(a), 100 Stat. 2754.  By providing
that special trial judges could hear and decide three different
categories of cases, and could hear (but not decide) "any other
proceeding," Congress codified the chief judge's longstanding
authority to assign any case within the Tax Court's jurisdiction to a
special trial judge for hearing and report.

   C. Petitioners contend that "the 'any other proceeding' language of
26 U.S.C. 7443A(b)(4) must be read in light of the narrow grants of
jurisdiction in Sections (b)(1)-(3)." Pet. Br. 17.  They suggest that
subsection (b)(4) is a "catch-all" provision, Pet. Br. 17, 22,
embracing the same type of cases as the declaratory judgment
proceedings and small tax cases described in the first three
subsections;  on that view, subsection (b)(4) does not authorize
assignment to a special trial judge of large or complex cases like
theirs.  Pet. Br. 17-20.

   Subsection (b)(4), however, is clearly not a "catch-all" designed
to plug unintended gaps left by subsections (b)(1) through (b)(3).  As
the very next subsection makes clear, special trial judges can hear
and decide declaratory judgment proceedings and small tax cases under
subsections (b)(1) through (b)(3);  they can hear but may not decide
proceedings under subsection (b)(4).  26 U.S.C. 7443A(c).  The lesser
authority special trial judges exercise in proceedings under
subsection (b)(4) prevents that provision from serving as a
"catch-all" for subsections (b)(1) through (b)(3).  It also furnishes
additional evidence that the scope of subsection (b)(4) must be
greater than that of subsections (b)(1) through (b)(3):  for if the
cases special trial judges can hear (but not decide) under subsection
(b)(4) are limited to declaratory judgment actions and small cases of
the sort they could hear and decide under subsections (b)(1) through
(b)(3), subsection (b)(4) would be superfluous.  See, e.g.,
Pennsylvania Dep't of Public Welfare v. Davenport, 110 S. Ct. 2126,
2133 (1990) ("Our cases express a deep reluctance to interpret a
statutory provision so as to render superfluous other provisions in
the same enactment.").

   Petitioners' misunderstanding of the functin of subsection (b)(4)
renders inapposite their analogy to Gomez v. United States, 490 U.S.
858 (1989).  Pet. Br. 17-22.  Gomez involved the question whether
Section 636(b) of the Federal Magistrates Act (28 U.S.C. 636(b))
authorized a district court to assign a magistrate to preside over
jury selection in a criminal felony trial without the defendant's
consent.  Although the statutory language allowing assignment to a
magistrate of "such additional duties as are not inconsistent with the
Constitution and laws of the United States" is broad, this Court
reasoned that presiding over jury selection was unrelated to the
carefully defined grant of authority to conduct trials of civil
matters and minor criminal cases and was at odds with the "repeated
statements" in the legislative history that magistrates should only
"handle subsidiary matters to enable district judges to concentrate on
trying cases." 490 U.S. at 872.  Moreover, the Court remarked, there
could be no meaningful review and correction of jury selection by the
district court.  Consequently, the Court concluded that Congress could
not have intended for the "additional duties" clause to include
presiding over jury selection in felony trials.  Id. at 874-876.

   Unlike the "catch-all" provision at issue in Gomez, subsection
(b)(4) does not extend special trial judges' authority to hear and
decide cases under subsections (b)(1) through (b)(3) to any case
within the Tax Court's jurisdiction.  A special trial judge assigned
pursuant to subsection (b)(4) may only hear a case and prepare
proposed factual findings and legal conclusions;  a regular Tax Court
judge remains responsible for deciding the case.  26 U.S.C. 7443A(c).
Precisely because the special trial judge's authority under subsection
(b)(4) is less than that under subsections (b)(1) through (b)(3), it
extends to "any other proceeding" before the Tax Court, regardless of
the amount involved or the nature of the controversy.

   D. Petitioners contend that "(e)ven if a special trial judge may
hear a complex tax case, he may not effectively resolve it subject
only to deferential Tax Court review." Pet. Br. 20.  The relevance of
this point to the question on which this Court granted certiorari --
whether the assignment of petitioners' cases to a special trial judge
is authorized by 26 U.S.C. 7443A(b)(4), see Pet. Br. i -- is not
immediately apparent.  The question whether the assignment is
permitted is different from the question of the appropriate standard
of review once the assignment is made.  The court of appeals properly
rejected petitioners' assertion that Chief Judge Sterrett
"rubber-stamp(ed)" the special trial judge's report, Pet. Br. 24, and
petitioners did not seek review of that claim, see Br. in Opp. 7 n.6.

   In any event, petitioners are quite correct that special trial
judges may not decide cases assigned to them under 26 U.S.C.
7443A(b)(4), and are quite wrong in suggesting that a deferential
standard of review allows them in effect to do so.  Pet. Br. 6-7, 13,
21-23.  By statute, a special trial judge has no authority to decide a
case assigned under that provision;  that remains the responsibility
of a regular Tax Court judge.  26 U.S.C. 7443A(c);  see Pet. App. A7
("The chief judge had both the obligation and power to maintain full
responsibility for the decision in this case.").  As petitioners
(correctly) stated in the court of appeals, they "are entitled to a
careful de novo review of the findings of a special trial judge by a
tax court judge because the special trial judge cannot make the
decision in a case assigned to him under Section 7443A(b)(4)." Pet.
C.A. Reply Br. 3 (footnote omitted);  id. at 3 n.5 ("The
responsibility for evaluating the evidence is placed upon the tax
court judge who reviews the proposed report of the special trial
judge.");  accord Pet. Br. 43 n.42 (petitioners anticipated "de novo
review * * * when they accepted the mid-trial reassignment to Judge
Powell").  /9/

   Reversing field in this Court, petitioners now insist that de novo
review is forbidden by Tax Ct. R. 183.  Pet. Br. 6-7, 21.  Contrary to
petitioners' contention, Rule 183 does not limit Tax Court judges to
"clear error" review of special trial judges' reports.  Rule 183
provides that the Tax Court judge responsible for deciding a case may
adopt, modify, or reject the special trial judge's report in whole or
in part, may request additional briefing, and "may receive further
evidence" -- an authority that is flatly inconsistent with "clear
error" review, under which an appellate tribunal reviews the adequacy
of findings on the basis of the record before the fact-finder.  See
Anderson v. City of Bessemer City, 470 U.S. 564, 573-574 (1985).
Petitioners rely entirely on the last sentence in the Rule, which
states that "(d)ue regard" shall be given to special trial judges'
credibility determinations and that "findings of fact recommended by
the Special Trial Judge shall be presumed to be correct." Pet. Br.
6-7, 13, 21-23.  Although the phrasing of this sentence is not ideal,
it does not limit the regular Tax Court judge deciding the case to
"clear error" review, and has not been so understood by the Tax Court.
 Instead, the Rule requires the regular judge to start with the facts
found by the special trial judge before considering the parties'
proposed findings of "essential fact" under Tax Ct. R. 151(e)(3).  As
the court of appeals correctly concluded, the Tax Court judge to whom
the case is assigned "controls the outcome of the case,"
notwithstanding the presumption of correctness.  Pet. App. A7 n.8.
/10/

   Petitioners invoke the canon of statutory construction that
presumes Congress intended to enact a constitutional statute in their
effort to limit the "any other proceeding" language of 26 U.S.C.
7443A(b)(4) to small cases.  Pet. Br. 14-17.  A preference for giving
statutes a constitutional meaning, however, is a finger on otherwise
balanced scales at the end of the process of interpretation, not at
the beginning.  It is emphatically "not a license for the judiciary to
rewrite language enacted by the legislature." United States v.
Monsanto, 109 S. Ct. 2657, 2664 (1989) (quoting United States v.
Albertini, 472 U.S. 675, 680 (1985)).  Petitioners' interpretation of
subsection (b)(4) to mean "any other (small) proceeding" would require
this Court to override the plain language of the statute, its
structure, and the pre-codification history of special trial judges
hearing cases selected from the full cross-section of the Tax Court's
jurisdiction.  Canons of construction like the one petitioners invoke
are useful only when language is ambiguous and "a construction of the
statute is fairly possible by which the question may be avoided."
Crowell v. Benson, 285 U.S. 22, 62 (1932) (emphasis added).  It is not
authority to hold that a statute means what it plainly does not say.
CFTC v. Schor, 478 U.S. 833, 841 (1986);  Aptheker v. Secretary of
State, 378 U.S. 500, 515 (1964).

   II. PETITIONERS WAIVED ANY RIGHT TO CHALLENGE THE APPOINTMENT OF
THE SPECIAL TRIAL JUDGE IN THEIR CASE BY CONSENTING TO HAVE THEIR
CASES HEARD BY THE SPECIAL TRIAL JUDGE

   Petitioners not only failed to raise a timely objection to
assignment of their cases to a special trial judge, they expressly
consented to the assignment.  As the court of appeals correctly held,
"(b)y consenting to the assignment * * * (petitioners) waived" any
right to challenge the special trial judge's appointment under the
Appointments Clause, Art. II, Section 2, Cl. 2.  Pet. App. A8 n.9.
/11/

   A. This Court has emphasized that "(n)o procedural principle is
more familiar to (the) Court than that a * * * right may be forfeited
in criminal as well as civil cases by failure to make timely assertion
of the right before a tribunal having jurisdiction to determine it."
Yakus v. United States, 321 U.S. 414, 444 (1944);  accord United
States v. Socony-Vacuum Oil Co., 310 U.S. 150, 238-239 (1940);  Blair
v. Oesterlein Mach. Co., 275 U.S. 220, 225 (1927) ("There are
specially cogent reasons why this rule should be adhered to when the
question involves a practice of one of the great departments of the
government.").  Requiring timely assertion of an objection serves two
important purposes:  it promotes judicial economy by alerting the
lower court to a problem at a time when the court may be able to
resolve the matter to the party's satisfaction, see Wainwright v.
Sykes, 433 U.S. 72, 90 (1977);  and it prevents a party from pursuing
a certain course at trial for tactical reasons and later -- if the
outcome is unfavorable -- claiming that the course followed
constituted reversible error, see id. at 89.

   Petitioners' conduct in this case falls squarely within the letter
and spirit of this Court's settled practice of requiring
contemporaneous objections.  But petitioners did not just commit a
procedural default in the Tax Court;  they expressly consented to the
assignment of a special trial judge to hear and report on their cases
with full knowledge of the consequences of their decision.  /12/
Petitioners' consent led the Tax Court to assign special trial judge
Powell to hear and report on their cases, rather than another judge,
as was ordered in the case of the one litigant who did object to the
assignment.  J.A. 4-6.  If petitioners are permitted to withdraw their
consent now, many months of trial time will have been wasted.  What is
worse, petitioners will have been permitted to withdraw their consent
and assert reversible error not just after the trial, but after they
learned that the supposed error did not work to their benefit.

   This Court should not be moved by petitioners' crocodile tears that
their consent was involuntary.  Pet. Br. 49-50.  Consent to the
special trial judge's preparation of a report in petitioners' cases
was not a "compelled alternative" to retrial before a regular Tax
Court judge.  Pacemaker Diagnostic Clinic of America v. Instromedix,
Inc., 725 F.2d 537, 543 (9th Cir.) (en banc), cert. denied, 469 U.S.
824 (1984);  cf. CFTC v. Schor, 478 U.S. 833, 850 (1986) (offer of
"quicker and less expensive" adjudication does not necessarily coerce
consent).  Semble Arizona v. Fulminante, No. 89-839 (Mar. 26, 1991),
slip op. 4.  Conclusive proof is that the relief petitioners seek in
this Court -- "a remand for trial before a regular tax court judge,"
Pet. Br. 37 -- is precisely the prospect that petitioners insist
forced their consent in 1986.  The options available to petitioners
(consent to the special trial judge's preparation of the report or
retrial before a regular Tax Court judge) have not changed since that
time.  What is new is that petitioners now know that they lose under
the option they initially preferred.  If an Appointments Clause
challenge can ever be waived, petitioners should be held to have
waived it here.

   B. Petitioners contend that the court of appeals was required to
entertain their belated Appointments Clause challenge because
separation of powers claims may never be waived.  Pet. Br. 43-46.
/13/ The cases on which petitioners rely for this sweeping proposition
-- CFTC v. Schor, 478 U.S. 833 (1986), Glidden Co. v. Zdanok, 370 U.S.
530 (1962), and Lamar v. United States, 241 U.S. 103 (1916), Pet. Br.
41-47 -- hold only that litigants may not waive the structural
limitations of Article III, because that Article serves "institutional
interests that the parties cannot be expected to protect," Schor, 478
U.S. at 850-851.  The rationale of those cases has no necessary
application to separation of powers claims not involving the
Judiciary;  it is clearly inapplicable to petitioners' particular
challenge, which is based on a constitutional provision safeguarding
the prerogatives of the Executive that the Executive can be expected
to invoke and -- in tax cases -- will always be in a position to
invoke.  The Constitution separates the executive, legislative, and
judicial powers precisely because the great departments can be trusted
to protect their own institutional interests.  See, e.g., The
Federalist No. 51, at 349 (J. Madison) (J. Cooke ed. 1961) ("(T)he
great security against a gradual concentration of the several powers
in the same department, consists in giving to those who administer
each department, the necessary constitutional means, and personal
motives, to resist encroachments of the others.").  Exceptions to the
general rule of waivability should be reserved for situations where
litigants cannot be relied on to protect the institutional interests
at stake, not where we know they can.

   1. In Schor, this Court held that parties may waive their personal
right to adjudication by an Article III court, 478 U.S. at 848-850,
but "(t)o the extent that this structural principle (i.e., of Article
III) is implicated in a given case, * * * notions of consent and
waiver cannot be dispositive because the limitations serve
institutional interests that the parties cannot be expected to
protect," id. a 850-851.  /14/ Schor involved the assertion of
jurisdiction by the Commodity Futures Trading Commission, a
non-Article III forum, over a common law counterclaim -- "a claim of
the kind assumed to be at the 'core' of matters normally reserved to
Article III courts." Id. at 853.  Hence, the institutional interest at
stake was the "institutional integrity of the Judicial Branch," id. at
851 -- an interest that parties content to have their dispute resolved
by the CFTC might (at least initially) have no interest in protecting.

   Unlike the situation in Schor, the assignment of special trial
judges in Tax Court cases does not raise the specter of "a phalanx of
non-Article III tribunals equipped to handle the entire business of
the Article III courts," 478 U.S. at 855.  Tax controversies are not
matters of private right "normally reserved to Article III courts,"
id. at 853.  As petitioners concede, Pet. Br. 20 n.21, 35, tax
disputes are "matters, involving public rights, * * * which Congress
may or may not bring within the cognizance of the courts of the United
States, as it may deem proper," Murray's Lessee v. Hoboken Land &
Improvement Co., 59 U.S. (18 How.) 272, 284 (1856).  The need to
enforce "Article III limitations" that prompted the Court to dishonor
the express consent in Schor thus has no application to this case.
/15/

   Glidden and Lamar, on which petitioners also rely, Pet. Br. 41-43,
likewise involved challenges premised on Article III.  The validity of
the judgments in those cases arguably turned on the authority of the
judges who entered them (or participated in entering them).  See
Glidden, 370 U.S. at 535-537 (plurality opinion);  Lamar, 241 U.S. at
117-118.  /16/ Justice Harlan's explanation why the plurality would
ignore the waiver in those cases rests entirely on structural
limitations imposed by Article III and the prerogatives of the
Judicial Branch.  /17/

   2. Schor, Glidden, and Lamar all involved "institutional interests
that the parties cannot be expected to protect." 478 U.S. at 851.  The
concern in those cases was that if Article III objections could be
waived by the parties, the Judiciary might be incapable of protecting
its constitutional prerogatives.  The Judicial Branch exercises power
only through the decision of "Cases (and) Controversies," U.S. Const.
Art. III, Section 2, and if enforcement of waiver rules precluded it
from protecting its institutional interests in the context of deciding
such cases, those interests would go unprotected.  That rationale does
not extend to every separation of powers challenge, and has no
application to the Appointments Clause challenge raised by petitioners
in this case.

   Together with the Incompatibility Clause, Art. I, Section 6, Cl. 2,
/18/ the Appointments Clause reflects the Framers' rejection of the
cardinal feature of parliamentary systems, in which members of the
legislature serve as and appoint executive officers.  The structural
interests implicated in this case are thus those of the President and
the Executive Branch itself, which can be expected vigorously to
challenge legislative encroachments on presidential prerogatives under
that Clause.  /19/ Unlike the Article III limitations at issue in
Schor, Glidden, and Lamar, the Appointments Clause embodies an
interest that at least one of the parties to every tax dispute (the
Executive) can be expected to protect.  /20/ In Appointments Clause
cases the institutional interests at stake are those of the Executive,
and in tax cases the Executive will always be able to defend those
interests.  Accordingly, there is no reason, as there was in the
Article III cases, for rescuing petitioners from the choice they made
when they consented to allow the trial to proceed in accordance with
statutory procedures.

   Indeed, "(t)he Court (has) developed, for its own governance in the
cases confessedly within its jurisdiction, (the rule that) * * * (t)he
Court will not pass upon a constitutional question although properly
presented by the record, if there is also present some other ground
upon which the case may be disposed of." Ashwander v. TVA, 297 U.S.
288, 346-347 (1936) (Brandeis, J., concurring).  That prudential rule
applies with even greater force where, as here, the question is not
properly presented.

   III. THE TAX COURT CHIEF JUDGE'S APPOINTMENT OF THE SPECIAL TRIAL
JUDGE WHO HEARD PETITIONERS' CASES DID NOT VIOLATE THE APPOINTMENTS
CLAUSE

   A. A Special Trial Judge Assigned Under 26 U.S.C. 7443A(b)(4)
Performs Duties That May Be Performed By An Employee Not Subject To
The Appointments Clause

   Petitioners' contention that the special trial judge assigned to
their cases performed duties that can only be performed by an Officer
subject to the Appointments Clause must fail if special trial judges
do not effectively decide cases under 26 U.S.C. 7443A(b)(4).  /21/ For
it is well settled that persons who merely assist Officers in
discharging their duties, and whose authority is not significant under
the laws of the United States, are "lesser functionaries subordinate
to officers of the United States." Buckley v. Valeo, 424 U.S. 1, 126
n.162 (1976) (per curiam);  United States v. Smith, 124 U.S. 525,
531-532 (1888).  /22/

   A special trial judge assigned under 26 U.S.C. 7443A(b)(4) acts
only as an aide to the Tax Court judge responsible for deciding the
case.  26 U.S.C. 7443A(c).  That judge may adopt, modify, or reject
entirely the report of the special trial judge.  Tax Ct. R. 183(c).
Alternatively, he may request additional briefs, receive further
evidence, direct further oral argument, or recommit the report to the
special trial judge with instructions.  Ibid.  The special trial
judge's role is only to assist the judge in taking the evidence and
preparing proposed findings and an opinion.  In other words, the
special trial judge merely helps the Tax Court judges discharge the
responsibilities of their offices.  /23/ Cf. Morgan v. United States,
298 U.S. 468, 481-482 (1936).  The fact that staff attorneys acted as
special trial judges from 1943 until 1969, see pp. 12-13, supra, is
convincing evidence that special trial judges acting pursuant to 26
U.S.C. 7443A(b)(4) are employees rather than "Officers of the United
States." /24/

   Petitioners' analogy of special trial judges to federal
magistrates, Pet. Br. 28, ignores the special trial judges' lack of
independent decision-making authority in cases to which they are
assigned pursuant to 26 U.S.C. 7443A(b)(4) -- the only authority at
issue in this case.  Federal magistrates possess "all powers and
duties conferred or imposed upon United States commissioners by law or
by the Rules of Criminal Procedure for the United States District
Courts." 28 U.S.C. 636(a)(1).  /25/ United States commissioners, in
turn, possessed extensive power, "including the power to arrest and
imprison for trial * * * and to institute (certain) prosecutions."
Morrison v. Olson, 487 U.S. 654, 673 (1988);  Go-Bart Importing Co. v.
United States, 282 U.S. 344, 353 n.2 (1931).  A special trial judge
assigned under 26 U.S.C. 7443A(b)(4), in contrast, exercises no such
similar authority -- indeed, no independent authority whatever.  For
that reason, this Court's cases holding that United States
commissioners and federal magistrates are inferior Officers, Go-Bart
Importing Co. v. United States, 282 U.S. at 352;  Rice v. Ames, 180
U.S. 371, 378 (1901), do not establish that special trial judges
assigned under 26 U.S.C. 7443A(b)(4) are also exercising powers that
may be performed only by inferior Officers.

   It is true that magistrates, like special trial judges, may be
assigned to conduct hearings and to submit proposed findings of fact
and recommendations for disposition.  28 U.S.C. 636(b)(1)(B).  The
findings and proposed opinion of the magistrate, however, are reviewed
by the District Court only if the parties object.  28 U.S.C.
636(b)(1)(B);  see United States v. Raddatz, 447 U.S. 667, 673 (1980).
 By comparison, the Tax Court judge must decide every case assigned to
a special trial judge under 26 U.S.C. 7443A(b)(4);  no objection or
exception to the special trial judge's report is necessary or even
possible, because submission of the special trial judge's report is a
matter internal to the Tax Court.  See Pet. App. A8 n.8;  pp. 19-20
n.10, supra.

   Moreover, the conduct of evidentiary hearings is not confined to
Officers of the United States.  This Court has frequently gathered
evidence through assistants who were not appointed in conformity with
the Appointments Clause.  As early as Pennsylvania v. Wheeling &
Belmont Bridge Co., 50 U.S. (9 How.) 647, 657 (1850), the Court, on
its own motion and without statutory authority, appointed a
commissioner to take evidence and to provide a report to the Court.
That practice continues to this day.  See, e.g., United States v.
Louisiana, 394 U.S. 11, 78 (1969);  South Carolina v. Regan, 465 U.S.
367, 382 (1984).  See generally R. Stern, E. Gressman & S. Shapiro,
Supreme Court Practice Section 10.12, at 494-497 (6th ed. 1986).
Similarly, in Ex parte Peterson, 253 U.S. 300, 312-314 (1920), the
Court held that the United States District Court for the Southern
District of New York had "inherent power" to appoint third persons to
take testimony and report to the court.  Although the Supreme Court
and the lower Article III courts are all "Courts of Law" in which
Congress could vest authority to appoint "inferior Officers," the
Appointments Clause is explicit that appointment power is not
inherent, but exists only as "Congress may be Law" confer.  See Young
v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 816 n.1
(1987) (Scalia, J., concurring in judgment).  This Court's
longstanding recognition of Article III courts' power to appoint
special masters necessarily implies that such special masters are not
Officers of the United States subject to the Appointments Clause.  By
analogy, the Tax Court chief judge's appointment of special trial
judges to hear and report on cases under 26 U.S.C. 7443A(b)(4) does
not implicate the Appointments Clause.

   B. If Special Trial Judges Are Officers, They Are Inferior Officers
Whom The Tax Court Chief Judge, As "Head() of Department()," May
Appoint

   If special trial judges are Officers of the United States, they are
at most inferior Officers.  /26/ The Exceptions Clause to the
Appointments Clause states that "Congress may by Law vest the
Appointment of such inferior Officers, as they think proper, in the
President alone, in the Courts of Law, or in the Heads of
Departments." Art. II, Section 2, Cl. 2.  Since Congress has provided
by law that the Tax Court "chief judge may, from time to time, appoint
special trial judges," 26 U.S.C. 7443A(a), the appointment of the
special trial judge who heard petitioners' cases is valid if the chief
judge is a "Court() of Law" or a "Head() of Department()."

   The validity of the special trial judge's appointment therefore
turns on the constitutional status of the Tax Court.  As an initial
matter, the Tax Court must be located within one of the three Branches
of the federal government.  The tripartite structure of the
Constitution, and this Court's faithful adherence to that
organization, admit of no other alternative.  Bowsher v. Synar, 478
U.S. at 721-722;  INS v. Chadha, 462 U.S. at 951;  Buckley v. Valeo,
424 U.S. at 120-124.

   1. It is clear that the Tax Court cannot be in the Legislative
Branch.  Although Congress theoretically could perform some of the Tax
Court's functions by enacting private bills in response to the
petitions of individual taxpayers, it could do so only by passing laws
in conformity with the Bicameralism and Presentment Clauses.  See INS
v. Chadha, 462 U.S. at 951.  That work could not be performed by the
Tax Court because legislative power is not delegable:  Senators and
Representatives could not delegate the power to enact private bills
any more than they could "send delegates to consider and vote on bills
in their place." Mistretta v. United States, 488 U.S. 361, 425 (1989)
(Scalia, J., dissenting).  The notion that the Tax Court may be "an
independent judicial body in the legislative branch," Pet. Br. 36
(quoting Office of the Federal Register, Nat'l Archives and Records
Admin., The United States Government Manual 76 (1989/1990)), must be
rejected at the outset as wholly contrary to our system of separated
powers.

   In fact, the Tax Court does not pass private bills or exercise any
other legislative power.  Instead, it decides tax controversies
between the Commissioner and taxpayers.  If the Tax Court were somehow
understood to be in the Legislative Branch, the appointment of special
trial judges exercising governmental power by the chief judge would
plainly violate the Appointments Clause.  The very purpose of that
Clause is to guard against any intrusion by Congress into the
appointments process, beyond the advice and consent role specified in
the Constitution.  /27/ By its terms, the Clause authorizes no
legislative entity to make appointments.  If the Tax Court is such an
entity, it can have no power to appoint Officers of the United States.

   The fact that Congress amended 26 U.S.C. 7441 in 1969 to provide
that the Tax Court was established "under article I of the
Constitution," Section 951 of the Tax Reform Act of 1969, Pub. L. No.
91-172, 83 Stat. 730, does not lead to a contrary conclusion.  Most of
what Congress does is done "under article I of the Constitution." The
terms "Article I courts" or "legislative courts" refer not to the
status of those entities in the tripartite structure, but rather to
the fact that they are not established under Article III.

   2. Nor can the Tax Court be located within the Article III Judicial
Branch.  Although Congress established the Tax Court as "a court of
record," Section 951 of the Tax Reform Act of 1969, Pub. L. No.
91-172, 83 Stat. 730, more than that appellation and the function of
applying law to fact in particular cases is needed for Article III
status.  Because tax disputes are "matters, involving public rights, *
* * which congress may or may not bring within the cognizance of the
courts of the United States, as it may deem proper," Murray's Lessee
v. Hoboken Land and Improvement Co., 59 U.S. (18 How.) at 284, and
because Congress eschewed life tenure and salary protection for Tax
Court judges, the Tax Court cannot be considered part of the Judicial
Branch under the Constitution.  See U.S. Const. Art. III, Section 1;
Glidden, 370 U.S. at 552 (plurality opinion).

   Because the Tax Court is not part of the Judicial Branch, it is not
a "Court() of Law" within the meaning of the Appointments Clause.  The
Appointments Clause uses the term "the Courts of Law" to refer to
those courts created and existing under Article III as part of the
Judicial Branch.  Although so-called Article I courts created by
Congress are "courts" in the generic sense of that term, see Black's
Law Dictionary 358 (6th ed. 1991), the only courts expressly provided
for by the Constitution are the courts established under Article III.
It is most natural to conclude that when the Constitution refers to
"the Courts of Law" it is referring to the Courts of Law specified in
that document.  /28/

   Limitation of "the Courts of Law" to Article III courts is more
than just consistent with the Constitution's tripartite structure.
Structure has purpose.  The purpose of the Appointments Clause is to
prevent Congress from acquiring executive or judicial power through
control over the appointment of Officers of the United States.
Permitting appointments by Article III "Courts of Law" is faithful to
that purpose:  because members of the Judiciary enjoy life tenure and
protection against salary reduction, their independence from the
Legislative Branch in exercising any appointment authority is
guaranteed.  Likewise, the President and heads of Executive
Departments may act independently of the Congress in the exercise of
appointment authority by virtue of the checks and balances accorded
the Executive Branch in the constitutional scheme.  By contrast, a
governmental body neither within the Executive Branch nor protected by
Article III would be subservient to Congress.  Granting such bodies
appointment authority for "inferior Officers" would effectively place
the power to influence and control such appointments in the Congress
itself, thereby violating the fundamental separation of powers
concerns underlying the Appointments Clause.  /29/

   3. If the Tax Court cannot be in the Legislative Branch, and if it
cannot be in the Judicial Branch, it must be in the Executive Branch.

   a. Given the history of the Tax Court, this conclusion should come
as no surprise.  In 1924, Congress established the Tax Court's
predecessor, the Board of Tax Appeals, as "an independent agency in
the Executive Branch of the Government." Section 900 of the Revenue
Act of 1924, ch. 234, 43 Stat. 336-338.  /30/ Congress expanded the
Board's adjudicatory role, /31/ and in 1942 provided that the Board
was thereafter to be "known as The Tax Court of the United States,"
Section 509 of the Revenue Act of 1942, ch. 619, 56 Stat. 957.
Notwithstanding those changes, Congress repeatedly continued the Board
of Tax Appeals (and later the Tax Court) as "an independent agency in
the Executive Branch of the Government." Section 900 of the 1926 Act,
ch. 27, 43 Stat. 104;  Section 1100 of the 1939 Code, 26 U.S.C.
(1952);  Section 7441 of the 1954 Code.  Thus, for almost a half
century, the Board of Tax Appeals and the Tax Court were located
explicitly within the Executive Branch.

   To be sure, Congress in 1969 removed the language explicitly
stating that the Tax Court was an agency in the Executive Branch and
substituted language that it was a "court of record" established
"under Article I." 26 U.S.C. 7441.  But in doing so, Congress did not
-- and by that action could not -- remove the Tax Court from the
Executive Branch.  Section 7441 itself does not purport to transfer
the Tax Court to another branch of government.  Contrast 28 U.S.C.
991(a) (establishing Sentencing Commission "in the judicial branch").
It simply describes the status of the Tax Court as a "court" (it
applies law to fact) "of record" (it hears disputes on a record)
"established under Article I" (most congressional action is pursuant
to Article I).  The reference in Section 7441 to Article I of the
Constitution -- far from differentiating the post-1969 status of the
Tax Court from its pre-1969 status -- actually repudiates the
inference that the Tax Court was transferred to the Judicial Branch
(Article III).  Nor do any of the other reforms affecting the Tax
Court suggest such a drastic change.  To the contrary, with the
exception of giving the Tax Court contempt power, 26 U.S.C. 7456(c),
Congress did nothing to change the nature of the Tax Court's role in
reviewing the Commissioner's determinations of tax deficiencies.  See
Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 401-402
(1971) (Raum, J., concurring).

   Indeed, Congress implicitly intended no substantive change in the
Tax Court at all, because it continued the incumbent Tax Court judges
in office, specifically providing that "(t)he United States Tax Court
established under the amendment made by section 951 is a continuation
of the Tax Court of the United States as it existed prior to the date
of enactment of this Act, (and) the judges of the Tax Court of the
United States immediately prior to the date of enactment of this Act
shall become the judges of the United States Tax Court upon the
enactment of this Act." Act of Dec. 30, 1969, Pub. L. No. 91-172, Tit.
IX, Section 961, 83 Stat. 735-736 (emphases added).  Congress could
not have continued the sitting judges in office, consistent with the
Appointments Clause, if it had made such a dramatic change as
reconstituting the Court outside the Executive Branch.  See Olympic
Federal Savings & Loan Ass'n v. Director, Office of Thrift
Supervision, 732 F. Supp. 1183, 1191-1193 (D.D.C.), appeal dismissed
as moot, 903 F.2d 837 (D.C. Cir. 1990).  Congress may devolve
additional germane duties on existing officers, see Shoemaker v.
United States, 147 U.S. 282, 300-301 (1893), but purporting to
establish existing officers in a different branch of government would
plainly exceed constitutional limits.  /32/

   We readily acknowledge that the Tax Court's fit within the
Executive Branch may not be a perfect one.  Congress did not seem
overly punctilious about precisely where in the tripartite scheme the
Tax Court belonged when it amended the statute in 1969, /33/ and
certain features of the Tax Court's organization -- in particular the
purported protection of the Tax Court judges from removal, 26 U.S.C.
7443(f) -- raise serious constitutional concerns in any executive
entity.  See Myers v. United States, 272 U.S. 52, 162-164, 177 (1926).
 How such provisions should be interpreted, however, and whether they
would survive constitutional scrutiny, are not questions before the
Court in this case.  The question that the Court must confront -- if
it disagrees with us on the employee status of special trial judges
and the waiver point -- is the more basic one of which of the three
branches is home to the Tax Court.  How hospitable a home that branch
may turn out to be is a question for the future.  For the reasons we
have set forth, we think it is basic that (1) the Tax Court cannot be
in some headless fourth branch, (2) the Tax Court cannot be part of
the Legislative Branch, and (3) the Tax Court is not part of the
Judicial Branch.  It therefore remains, as it was expressly for nearly
a half century, part of the Executive Branch.

   Petitioners tellingly fail to explain where in the tripartite
system they would place the Tax Court.  They have not suggested that
it is itself unconstitutional, so they must fix it in one of the three
branches.  They agree that it is not part of the Article III Judicial
Branch, Pet. Br. 33-34, and cannot quite bring themselves to assert
that it is part of the Legislative Branch, id. at 36 ("the Tax Court
is considered by many to be 'a legislative body performing judicial
functions,' * * * or 'an independent judicial body in the legislative
branch'" (emphasis added)).  What they do assert repeatedly is that
the Tax Court is "an Article I court," id. at 29, without elaborating
on the significance of that label.  Indeed, it is central to their
submission that Congress took action in 1969 "to transform the Tax
Court from an executive agency into an Article I legislative court,"
ibid., but they do not explain how -- for separation of powers
purposes -- an "Article I legislative court" is any different from an
executive agency.  /34/

   b. The Appointments Clause does not say simply that Executive
Branch entities may appoint inferior Officers;  it specifies that
"Heads of Departments" may.  The term "Head() of Department()" means
the chief of any component of the Executive Branch that is not
subordinate to (or contained within) another component.  Cf.
Classification Act of 1923, ch. 265, Section 2, 42 Stat. 1488 ("'the
head of the department' means the officer or group of officers in the
department who are not subordinate or responsible to any other officer
of the department").  At the time the Constitution was drafted,
"department" meant "Separate allotment;  province or business assigned
to a particular person." 1 S. Johnson, A Dictionary of the English
Language (1755).  The chief judge is the "Head()" of the Tax Court,
and the Tax Court is a "Department()" because it is a component of the
Executive Branch not contained within any other component.

   Petitioners contend that only Officers of cabinet rank are "Heads
of Departments." Pet. Br. 30-32 & n.28.  The three authorities on
which they rely, however, all address the question whether a
"Department()" includes a component of the Executive Branch that is
subordinate to or contained within another component of the Executive
Branch.  Those authorities do not support the much broader proposition
that only cabinet members are "Heads of Departments."

   Petitioners' first authority is a colloquy between Gouverneur
Morris and James Madison on the last working day of the Constitutional
Convention.  Pet. Br. 32-33.  Morris moved to amend the Appointments
Clause to provide for the appointment of inferior Officers by the
President alone, the Heads of Departments, and the Courts of Law --
i.e., what became the Exceptions Clause.  Madison objected that the
amendment "does not go far enough if it be necessary at all --
Superior Officers below Heads of Departments ought in some cases to
have the appointment of the lesser offices." 2 M. Farrand, The Records
of the Federal Convention of 1787, at 627 (1966).  The amendment
carried over Madison's objection on a second vote.  Ibid.  Although
the colloquy suggests that Congress cannot vest in an Officer in
charge of a component contained within a department the authority to
appoint inferior Officers, it does not support petitioners' contention
that the head of a free-standing component of the Executive Branch may
not be given the power to appoint inferior Officers.

   Petitioners' second authority, Pet. Br. 31 -- this Court's
decisions in United States v. Germaine, 99 U.S. at 510-511, and Burnap
v. United States, 252 U.S. 512, 515 (1920) -- likewise hold only that
a component of a department is not itself a department whose head is
capable of exercising appointment power.  Although those cases
portrayed departments as "a great division of the executive branch of
the Government, like the State, treasury, and War, who is a member of
the Cabinet," Burnap, 252 U.S. at 515 (relying on Germaine, 99 U.S. at
510), the Court's decisions addressed only the situation in which
Congress was asserted to have vested authority to appoint an inferior
Officer in the chief of a bureau contained within a cabinet
department.  The Court had no occasion to consider whether entities
standing alone are themselves "Departments." See Germaine, 99 U.S. at
511 ("The association of the words 'heads of departments' with the
President and the courts of law strongly implies that something
different is meant from inferior commissioners and bureau officers,
who are themselves the mere aids and subordinates of the heads of the
departments." (emphasis added));  cf. Burnap, 252 U.S. at 515 ("It
('(t)he term head of a Department') does not include heads of bureaus
or lesser divisions." (citing Germaine)).  This Court's
characterizations of the Executive Branch "Departments" as being small
in number and led by members of the President's cabinet reflected the
context in which those cases arose (involving lesser bureaus within a
Department) and were simply descriptive of the composition of the
Executive Branch of government at the time.  /35/

   Petitioners' third authority consists of definitions used by
Congress in unrelated legislation and in committee reports on the
Twenty-fifth Amendment.  Pet. Br. 30-32.  It is true that 5 U.S.C. 101
defines "Executive departments" by means of a list that includes only
cabinet departments.  But that definition, and the succeeding
definitions of "Military departments," "Government corporation,"
"Independent establishment," and "Executive agency," 5 U.S.C. 102-105,
are set forth not for Appointments Clause purposes but for purposes of
certain other statutes.  See, e.g., 5 U.S.C. 301 (conferring authority
to promulgate regulations only on Executive and Military departments);
 5 U.S.C. 905(a) (forbidding certain reorganizations involving
Executive departments).  The fact that the Tax Court may not be
covered by these other statutes does not prevent it from being an
entity within the Executive Branch for Appointments Clause purposes.

   The committee reports on the Twenty-fifth Amendment recognize that
"Heads of Departments" includes more than the members of the
President's Cabinet.  The House of Representatives' original proposal
for that Amendment provided for the transfer of the President's power
to the Vice President upon the written declaration by the Vice
President and a majority of the "heads of the executive departments"
that the President was unable to discharge the power and duties of his
office.  The House of Representatives subsequently amended that
language to require written declaration of the President's inability
to discharge his duties from a majority of the "Principal officers of
the executive departments," rather than from a majority of the "heads
of the executive departments," in order "to make it clearer that only
officials of Cabinet rank should participate in the decision as to
whether presidential inability exists." H.R. Rep. No. 203, 89th Cong.,
1st Sess. 3, 15-16 (1965) (emphasis added).  There would have been no
need to abandon the language under which the written declarations
would be provided by the "heads of the executive departments" if that
language embraced only members of the President's cabinet.  /36/

   Petitioners' definition of executive "Department()" to exclude
free-standing components of the Executive Branch is more than just
poor semantics.  It deprives all non-Article III courts and nearly 50
free-standing agencies of the Executive Branch, see 55 Fed. Reg.
44,196 (1990), of the ability to appoint inferior Officers.
Petitioners concede that acceptance of their position will remove
appointment authority from all non-Article III courts.  Pet. Br. 40.
/37/ They insist, however, that "all other adjudicatory officers and
agents in the federal government are different from Tax Court special
trial judges in significant ways." Pet. Br. 38.

   But petitioners' conclusion -- based on their examination of
administrative law judges and staff attorneys of the Securities and
Exchange Commission -- depends on the remarkable assertion that all
individuals in agencies (except their heads) are "employees." /38/
Pet. Br. 39.  Without painting a bulls-eye on inferior Officers whose
appointments would be rendered invalid under petitioners' theory, we
think it obvious that between the "employees" and "heads" of agencies
are a significant number of inferior Officers.  Cf. 3 J. Story,
Commentaries on the Constitution of the United States Section 1538
(1833) ("'inferior officers,' * * * probably includes ninety-nine out
of a hundred of the lucrative offices in the government").  Here
petitioners meet themselves coming and going.  For if inferior
Officers include legal assistants who hear and report on tax cases --
as petitioners argue in asserting that special trial judges are not
mere employees, Pet. Br. 27-28 -- they surely account for a large
number of positions in agencies as well.  And their appointments, if
made by the heads of those allegedly non-"departmental" components of
the Executive Branch, would all be invalid under petitioners'
iconoclastic submission.

   It is no answer to say, as petitioners do, Pet. Br. 38, that
Congress may vest the authority to appoint all inferior Officers in
the President alone.  That is of course true.  But in providing for
the appointment of inferior Officers by the Heads of Departments, the
Framers anticipated a time when appointment by the President alone of
all inferior Officers in the Executive Branch would be inconvenient,
if not infeasible.  See 2 M. Farrand, supra, at 539 ("(Mr. King) did
not suppose it was meant that all the minute officers were to be
appointed by the * * * original source, but by the higher officers of
the departments to which they belong.").  /39/

                              CONCLUSION

   The judgment of the court of appeals should be affirmed.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   SHIRLEY D. PETERSON

      Assistant Attorney General

   JOHN G. ROBERTS, JR.

      Deputy Solicitor General

   STEPHEN J. MARZEN

      Assistant to the Solicitor General

   GARY R. ALLEN

   STEVEN W. PARKS

      Attorneys

   APRIL 1991

   /1/ The Tax Court is comprised of 19 judges who are nominated by
the President and confirmed by the Senate.  26 U.S.C. 7443.

   /2/ A special trial judge is appointed by the chief judge of the
Tax Court.  26 U.S.C. 7443A(a).  The Tax Court currently employs 14
special trial judges.  Special trial judges receive 90% of the salary
of regular Tax Court judges and do not serve fixed terms.  26 U.S.C.
7443A(d).

   /3/ Judge Wilbur's disability ultimately compelled him to retire
from active service on the Tax Court and he assumed senior status on
April 1, 1986.  J.A. 8.

   /4/ Pursuant to 26 U.S.C. 7444(c), the chief judge has designated
each judge sitting alone as a "division" of the Tax Court.

   /5/ Appeals from the decisions entered in three of the other test
cases were taken to the United States Courts of Appeals for the Fourth
and Sixth Circuits.  Those cases, however, were later settled.

   /6/ Commissioners were apparently "used sparingly" at first.  H.
Dubroff, The United States Tax Court:  An Historical Analysis 346
(1979).  The first reported designation of a "commissioner" occurred
in 1948.  The comissioner was assigned to hear the evidence and make
recommended findings of fact, but not to propose conclusions of law.
Bib Mfg. Co. v. Secretary of War, 12 T.C. 665, 672 (1949).

   /7/ The elective small case procedure originally applied only to
cases involving disputed issues of no more than $1,000, an amount
increased to $1,500 in 1972, Act of Oct. 20, 1972, Pub. L. No. 92-512,
Section 203(b)(2), 86 Stat. 945, to $5,000 in 1978, Revenue Act of
1978, Pub. L. No. 95-600, Section 502(a)(1), 92 Stat. 2879 and to
$10,000 in 1984, Tax Reform Act of 1984, Pub. L. No. 98-369, Section
461, 98 Stat. 823.  Proceedings in such cases may be conducted
informally, and the decisions entered in them are not appealable by
either party.  26 U.S.C. 7463.

   /8/ See, e.g., Perrett v. Commissioner, 74 T.C. 111 (1980);  Karme
v. Commissioner, 73 T.C. 1163 (1980), aff'd, 673 F.2d 1062 (9th Cir.
1982);  Jacqueline, Inc. v. Commissioner, 36 T.C.M. (CCH) 1363 (1977);
 Estate of Wheeler v. Commissioner, 37 T.C.M. (CCH) 51 (1978);  Estate
of Thurner v. Commissioner, 37 T.C.M. (CCH) 981 (1978);  McKinley v.
Commissioner, 37 T.C.M. (CCH) 1769 (1978);  Freidus v. Commissioner,
39 T.C.M. (CCH) 740 (1979).  See generally 2A L. Casey, Federal Tax
Practice Section 8.34, at 275 (1981) (the assignments of special trial
judges, i.e., commissioners, covered a "broad range," including "the
trial of lengthy cases").

   /9/ The record in no way supports the contention that the special
trial judge in effect decided petitioners' cases.  As the court of
appeals explained in rejecting this assertion, "the opinion in this
case was issued by the Tax Court in the name of the chief judge," who
"had both the obligation and power" to decide the case.  The court of
appeals found the "record * * * devoid of any evidence that even
remotely suggest(ed)" that the chief judge failed to discharge his
obligation "in good faith," other than what it surmised was a short
time span between the filing of the special trial judge's report and
issuance of the opinion by the chief judge.  Pet. App. A7-A8.

   On the last point, the court of appeals apparently credited
petitioners' claim that the special trial judge filed his report on
the same day Chief Judge Sterrett issued his opinion.  Pet. App. A8.
Nothing in the record supports that assertion.  The Tax Court's docket
entries and order on which petitioners rely, Pet. Br. 8, indicate that
the case was formally reassigned to Chief Judge Sterrett "for
disposition" on October 21, 1987, prior to his entry of decision on
that day.  J.A. 6, 15.  They do not reflect the date on which the
special trial judge's report was submitted to Chief Judge Sterrett.
Ibid.  Indeed, the Tax Court's practice is formally to reassign cases
heard by special trial judges to regular Tax Court judges only when
the latter are ready to enter decisions in the cases.  See, e.g.,
Abeson v. Commissioner, 59 T.C.M. (CCH) 391 (1990) (Docket Nos. 82 &
83), appeal pending on other grounds, No. 91-70086 (9th Cir.);  Corra
Resources, Ltd. v. Commissioner, 59 T.C.M. (CCH) 102 (1990) (Docket
Nos. 28 & 29), appeal pending on other grounds, No. 90-3365 (7th
Cir.);  Hildebrand v. Commissioner, 58 T.C.M. (CCH) 1470 (1990)
(Docket Nos. 20 & 21), appeal pending on other grounds, No. 91-70030
(9th Cir.).  For that reason, the date on which the chief judge
reassigned petitioners' cases to himself "for disposition" tells
nothing about how long the chief judge had the report or worked on the
cases prior to deciding them.  Yet the docket entries and order are
all that petitioners point to in support of their charge that the
chief judge acted -- contrary to 26 U.S.C. 7443A(c) -- as a "rubber
stamp." Pet. Br. 24.  See FCC v. Schreiber, 381 U.S. 279, 296 (1965)
(administrative agencies are entitled to presumption "that they will
act properly and according to law").

   /10/ The court of appeals also rejected petitioners' argument that
Stone v. Commissioner, 865 F.2d 342, 344-347 (D.C. Cir. 1989),
reversing Rosenbaum v. Commissioner, 45 T.C.M. (CCH) 825 (1983),
limits Tax Court judges to "clear error" review of special trial
judges' proposed factual findings.  Pet. App. A8 n.8.  Although Stone
so held, see 865 F.2d at 345, the Tax Court has never retreated from
the position it took in Rosenbaum that "the presumptive correctness of
the Special Trial Judge's report does not impair nor dilute our duty
of bearing the ultimate responsibility for determining matters before
us." Rosenbaum, 45 T.C.M. (CCH) at 827.  In accordance with that
position, the Tax Court no longer furnishes litigants a copy of the
special trial judge's report, nor does it invite the parties to file
exceptions to the report.  Ibid.; Pet. App. A8 n.8.  As the court of
appeals concluded, "this change in rules, in our view, confirms that
the Tax Court's relationship with its special trial judges cannot be
analogized to typical appellate review." Ibid.  No court has held to
the contrary since the change in the Tax Court's practice.

   Petitioners (Pet. Br. 23) quote the court of appeals' statement
that whether a particular transaction is a sham "is a question of fact
reviewed under the clearly erroneous standard," Pet. App. A8, but the
court of appeals was referring to its review of the Tax Court's
determination, not the regular Tax Court judge's review of the special
trial judge's report.

   /11/ Petitioners' express consent distinguishes this case from
Gomez, in which the defendant objected to permitting a magistrate to
conduct jury selection, and from United States v. France, 886 F.2d 223
(9th Cir. 1989), aff'd without opinion by equally divided court, 111
S. Ct. 805 (1991), in which the court of appeals entertained the
challenged of a litigant who failed to object to the same action.

   On the same day the Court granted certiorari in this case, the
Court also granted certiorari in Peretz v. United States, No. 90-615
(Jan. 22, 1991).  Peretz presents the question whether express consent
to assignment of a magistrate for jury selection waives any right to
challenge the assignment on the authority of this Court's subsequent
decision in Gomez.

   /12/ The chief judge notified petitioners of his proposal to assign
their cases to special trial judge Powell "for purposes of preparing
the report," J.A. 8, and invited petitioners' objection (if any) to
the assignment, J.A. 9.  Petitioners -- represented by counsel --
discussed with the chief judge the options available to them and the
terms on which they would consent to the assignment, J.A. 10-11, and
ultimately entered a formal stipulation to the assignment, J.A. 13.
Whether the Tax Court's procedures are sufficient to ensure knowing
and voluntary consent in other cases, Pet. Br. 47-48, is irrelevant to
petitioners' claim in this one:  their consent was knowing and
voluntary, and outside the First Amendment context parties may assert
only their own rights, not those of others.  E.g., Powers v. Ohio, No.
89-5011 (Apr. 1, 1991), slip op. 10;  Singleton v. Wulff, 428 U.S.
106, 114 (1976).

   /13/ Although challenges to an Article III court's subject matter
jurisdiction are not waivable, the Tax Court is not an Article III
court, and, in any event, petitioners "do not claim that Tax Court
special trial judges lack subject matter jurisdiction." Reply to Br.
in Opp. 3.

   /14/ Petitioners' edited quotation of the holding in Schor, Pet.
Br. 44, begins after the Court's reference to "this structural
principle," which refers to Article III, 478 U.S. at 850 (emphasis
added), and omits the first clause of the next sentence, which states
that "(w)hen these Article III limitations are at issue, notions of
consent and waiver cannot be dispositive because the limitations serve
institutional interests that the parties cannot be expected to
protect," id. at 851 (emphasis added).

   /15/ Pacemaker Diagnostic Clinic of America v. Instromedix, Inc.,
725 F.2d 537 (9th Cir.) (en banc), cert. denied, 469 U.S. 824 (1984),
is distinguishable for the same reason.  At issue in that case was the
consensual assignment of a case to a magistrate for adjudication.
Thus, the case presented essentially the same question as in Schor --
whether an official who did not enjoy the life tenure and salary
protection guaranteed to the Article III Judiciary could properly
adjudicate the claims in question.

   /16/ See also Burnham v. Superior Court, 110 S. Ct. 2105, 2109
(1990) (plurality opinion) ("The proposition that the judgment of a
court lacking jurisdiction is void traces back to the English Year
Books, * * *.  Traditionally that proposition was embodied in the
phrase coram non judice, 'before a person not a judge' -- meaning, in
effect, that the proceeding in question was not a judicial proceeding
because lawful judicial authority was not present, and could therefore
not yield a judgment.").

   /17/ Whatever may be the rule when a judge's authority is

      challenged at the earliest practicable moment * * *, in other
      circumstances involving judicial authority this Court has
      described it as well settled "that where there is an office to
      be filled and one acting under color of authority fills the
      office and discharges its duties, his actions are those of an
      officer de facto and binding upon the public." The rule is
      founded upon an obviously sound policy of preventing litigants
      from abiding the outcome of a lawsuit and then overturning it if
      adverse upon a technicality of which they were previously aware.
       * * * The rule does not obtain, of course, when the alleged
      defect of authority operates as a limitation on this Court's
      appellate jurisdiction.  In other circumstances as well, when
      the statute claimed to restrict authority is not merely
      technical but embodies a strong policy concerning the proper
      administration of judicial business, this Court has treated the
      alleged defect as "jurisdictional" and agreed to consider it on
      direct review even though not raised at the earliest practicable
      opportunity.

370 U.S. at 535-536 (emphases added;  citations omitted);  see id. at
536 (discussing Lamar).

   /18/ Art. I, Section 6, Cl. 2 ("(N)o Person holding any Office
under the United States, shall be a Member of either House during his
Continuance in Office.").

   /19/ Contrary to petitioners' suggestion, this case does not
implicate any prerogative of the Judiciary to appoint inferior
Officers as a "Court() of Law" under the Appointments Clause.  Pet.
Br. 46 n.46.  There is no question that the Tax Court is not an
Article III court.  Even more clearly, the chief judge of that court,
in whom 26 U.S.C. 7443A(a) vests the power of appointing special trial
judges, is not an Article III court.

   /20/ In listing cases in which the Justice Department failed, in
petitioner's view, to defend adequately the interests of the Executive
Branch, Pet. Br. 46 n.47, petitioners fail to mention that the
Solicitor General argued against the constitutionality of the
legislation in Morrison v. Olson, 487 U.S. 654, 659 (1988), Bowsher v.
Synar, 478 U.S. 714, 716 (1986), and INS v. Chadha, 462 U.S. 919, 922
(1983).

   /21/ Petitioners seem to concede as much, when they argued that
they had no occasion to raise their Appointments Clause challenge
until the Tax Court -- in their view -- "denied the de novo review
they anticipated when they accepted the mid-trial reassignment to
Judge Powell." Pet. Br. 43 n.42.

   /22/ See Steele v. United States No. 2, 267 U.S. 505, 508 (1925)
("The deputy marshal is not in the constitutional sense an officer of
the United States, and yet marshals and deputy marshals are the
persons chiefly charged with the enforcement of the peace of the
United States, as that is embraced in the enforcement of federal
law");  United States v. Germaine, 99 U.S. 508, 511 (1878) ("inferior
commissioners and bureau officers" are "mere aids and subordinates");
United States v. Mitchell, 89 F.2d 805, 808 (D.C. Cir. 1937)
(attorneys employed by independent administrative agency are not
"Officers" for purposes of Appointments Clause).

   /23/ Even the ability of special trial judges to regulate
proceedings before them is made "(s)ubject to the specifications and
limitations in the order designating" the special trial judge, Tax Ct.
R. 181, so that regulation of every proceeding remains subject at all
times to the complete control of the chief judge of the Tax Court.

   /24/ On signing the Omnibus Budget Reconciliation Act of 1989, the
President addressed a provision authorizing appointment of special
masters by the United States Claims Court, and noted that

      an "arbitrary and capricious" standard for review of special
      master decisions by Claims Court judges could raise
      constitutional questions by vesting significant authority
      pursuant to the laws of the United States in persons whose
      appointment and removal are inconsistent with the requirements
      of Article II of the Constitution, and by circumscribing the
      ability of Article I and Article III judges to review the
      decisions of these persons.  Accordingly, to place this issue
      beyond doubt, the Attorney General and the Secretary of HHS will
      work together to submit legislation that would ensure de novo
      review of decisions rendered by the special masters.

Statement of the President on Signing the Omnibus Budget
Reconciliation Act of 1989, 25 Weekly Comp. Pres. Doc. 1970-1971 (Dec.
19, 1989).  Unlike Claims Court special masters, the reports of
special trial judges assigned under 26 U.S.C. 7443A(b)(4) are already
reviewed de novo by the Tax Court judge responsible for deciding the
case.  See pp. 17-19 & nn.9-10, supra.  Moreover, the constitutional
status of the Tax Court and the Claims Court may not be the same, see,
e.g., 28 U.S.C. 176 (Claims Court judges removable by the United
States Court of Appeals for the Federal Circuit), and accordingly they
may differ in their capacity to appoint inferior Officers.

   Although special trial judges may be assigned to render the
decision of the court in declaratory judgment proceedings and small
tax cases within 26 U.S.C. 7443A(b)(1)-(3), see 26 U.S.C. 7443A(c),
petitioners have standing only to assert their own rights, not those
of taxpayers whose cases are assigned to special judges under other
provisions.  See Powers v. Ohio, No. 89-5011 (Apr. 1, 1991), slip op.
10 ("In the ordinary course, a litigant must assert his or her own
legal rights and interests, and cannot rest a claim to relief premised
on the legal right or interests of third parties.").  If the special
trial judge assigned to their cases performed duties that may
performed by an employee, petitioners suffered no injury from any
defect in appointment.  See Allen v. Wright, 468 U.S. 737, 751 (1984)
(Article III standing requires that "(t)he injury must be 'fairly'
traceable to the challenged action, and relief from the injury must be
'likely' to follow from a favorable decision.");  see also Buckley v.
Valeo, 424 U.S. at 137-139 (members of Federal Election Commission not
appointed consistent with the Appointments Clause could continue to
perform statutory duties not requiring an Officer).  The Tax Court's
conclusion in First Western Government Securities, Inc. v.
Commissioner, 94 T.C. 549 (1990), appeal pending sub nom. Samuels,
Kramer & Co. v. Commissioner, Nos. 90-4060 & 90-4064 (2d Cir.) (argued
Oct. 24, 1990), that special trial judges are inferior Officers,
rested on their ability to decide small cases under 26 U.S.C. 7443A(c)
-- an authority that the special trial judge assigned to petitioners'
cases did not have.

   /25/ With the consent of the parties, magistrates are also
"authorized to preside at and enter final judgment in civil trials,
including those tried before a jury * * * (and) to conduct jury as
well as bench trials on any misdemeanor charge," 28 U.S.C. 636(a)(4)
and (c)(1), as this Court pointed out in Gomez, 490 U.S. at 870.  In
such trials, appeal may then be taken directly to the court of appeals
(unless the parties also consent to appeal to a judge of the District
Court).  28 U.S.C. 636(c)(1) and (3).

   /26/ Petitioners' suggestion, Pet. Br. 28 n.26, that special trial
judges are principal Officers is fanciful.  In Morrison v. Olson, 487
U.S. at 671, this Court held that an independent prosecutor was
"clearly" only an inferior Officer, despite her "full power and
independent authority to exercise all investigative and prosecutorial
functions and powers of the Department of Justice." Tax Court special
trial judges plainly occupy no higher status.

   /27/ See Bowsher v. Synar, 478 U.S. at 712-727;  Buckley v. Valeo,
424 U.S. at 129;  Springer v. Philippine Islands, 277 U.S. 189, 202
(1928);  The Federalist No. 77, at 518-519 (A. Hamilton) (J. Cooke ed.
1961) ("Every mere council of appointment, however constituted, will
be a conclave, in which cabal and intrigue will have their full scope.
 * * * The example of most of the states in their local constitutions,
encourages us to reprobate the idea.");  G. Wood, Creation of the
American Republic 407, 435-436, 452, 551-552 (1969) (granting of
appointment powers to state legislatures had been a "principal source
of division and faction" in state governments, destroying "all
responsibility," creating "a perpetual source of faction and
corruption," and, according to Madison, "depart(ing) too far from the
Theory which requires a separation of the great Departments of
Government").

   The Framers were especially anxious to prevent the Legislative
Branch from arrogating the power to decide cases.  See The Federalist
No. 47, at 326 (J. Madison) (J. Cooke ed. 1961) ("Were the power of
judging joined with the legislative, the life and liberty of the
subject would be exposed to arbitrary controul, for the judge would
then be the legislator." (quoting J. Montesquieu, The Spirit of Laws
(1748)));  1 W. Blackstone, Commentaries *259-260 ("Were (judicial
power) joined with the legislative, the life, liberty, and property,
of the subject would be in the hands of arbitrary judges, whose
decisions would be then regulated only by their own opinions, and not
by any fundamental principles of law;  which, though legislators may
depart from, yet judges are bound to observe.").

   /28/ Amicus curiae Erwin N. Griswold argues that the Tax Court
"naturally falls within the phrase 'Courts of Law' as the Framers used
those words in the Appointments Clause." Amicus Br. 9.  His only
support for the repeated assertion that the Framers thought it
"natural," id. at 7, 9, 12, 18, to lodge the power to appoint inferior
Officers in bodies susceptible to congressional influence, however, is
the history of territorial courts appointing their own clerks and
commissioners.  See id. at 12-15.  Although the Framers surely
understood that the territorial courts functioned as "courts" in the
generic sense of that term, it does not follow that territorial clerks
and commissioners were "inferior Officers" subject to the Appointment
Clause, cf. Metropolitan R.R. v. District of Columbia, 132 U.S. 1, 7-9
(1889);  Hobson v. Hansen, 265 F. Supp. 902, 919-920 (D.D.C. 1967)
(three-judge court) (Wright, J., dissenting), or that territorial
courts were "Courts of Law" rather than "Departments" within the
Executive Branch.

   The only historical evidence on this latter point is the Northwest
Ordinance of July 13, 1787.  As amended by the First Congress, that
law provided that "the President shall nominate, and by and with the
advice and consent of the Senate, shall appoint all officers which by
the said ordinance were to have been appointed by the United States in
Congress assembled." Act of Aug. 7, 1789, ch. 8, Section 1, 1 Stat.
53.  Among those officers were the three judges of the court for the
Northwest Territory.  1 Stat. 51 n.(a).  Significantly, the First
Congress made provisions for compensating those judges in the Act of
Sept. 11, 1789, ch. 13 Section 1, 1 Stat. 67-68 (Executive Officers in
compensation statute included "the three judges of the western
territory"), entitled "An Act for Establishing the Salaries of the
Executive Officers of Government" (emphasis added), and not in the
parallel provisions of the Act of Sept. 23, 1789, ch. 18, Section 1, 1
Stat. 72, providing, inter alia, for the compensation of "the judges
of the Supreme and other Courts." Cf. Judiciary Act of Sept. 24, 1789,
ch. 20, 1 Stat. 73-93 (making no reference to territorial courts).  It
is well established that an Act "passed by the first Congress
assembled under the constitution, many of whose members had taken part
in framng that instrument, * * * is contemporaneous and weighty
evidence of its true meaning." Marsh v. Chambers, 463 U.S. 783, 790
(1983) (quoting Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 297
(1888)).

   Amicus responds to these Acts of the First Congress by down-playing
the importance of their titles.  But Congress, unlike the English
Parliament, "considers and passes the entire act including the title,
giving authenticity to every component." 2A Sutherland, Statutes and
Statutory Construction Section 47.03, at 121 (N. Singer rev. of C.
Sands 4th ed. 1984);  see, e.g., Mead Corp. v. Tilley, 490 U.S. 714,
722-723 (1989) (resolving ambiguity "by the title" of the
legislation);  FTC v. Mandel Bros., 359 U.S. 385, 388-389 (1959) ("The
Title of the Act * * *, though not limiting the plain meaning of the
text, is nonetheless a useful aid in resolving an ambiguity.");
Maguire v. Commissioner, 313 U.S. 1, 9 (1941) ("While the title of an
act will not limit the plain meaning of the text, it may be of aid in
resolving an ambiguity." (citations omitted)).

   /29/ Nor is the Tax Court an adjunct of an Article III court.  Cf.
Mistretta v. United States, 488 U.S. at 368, 385 (Sentencing
Commission is established "as an independent commission in the
judicial branch of the United States." 28 U.S.C. 991(a));  28 U.S.C.
151 (bankruptcy courts constituted as units of the United States
district courts).  Tax Court judges are not appointed by any court,
but by the President, 26 U.S.C. 7443(b);  they are not supervised by
any court as regards their internal administration, 26 U.S.C. 7453;
and they are not removable by any court, 26 U.S.C. 7443(f).  The
legislative history of the 1969 Tax Court reform underscores that
"(t)he committee amendments do not place the Tax Court under the
supervision of the Judicial Conference or the Direction of the
Administrative Office of the Article III courts or give them any power
or control over the Tax Court." S. Rep. 552, 91st Cong., 1st Sess. 304
n.3 (1969);  see S. Conf. Rep. No. 782, 91st Cong., 1st Sess. 341
(1969) (House bill had no provisions concerning Tax Court;  conference
substitute "follows the Senate amendment").

   /30/ As originally established, its decisions were not directly
reviewable by the courts of appeals and were not finally determinative
of the liability in question.  Rather, the taxpayer or the government
could obtain review by bringing, respectively, a separate suit for a
refund or a collection suit with respect to the taxes in issue.  See
Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 721-722 (1929).
Such review was not, strictly speaking, de novo, since the statute
provided that the findings of the Board would be prima facie evidence
of the facts.

   /31/ The Revenue Act of 1926, ch. 27, 44 Stat. 9, provided that the
Board's decisions would be directly reviewable by the courts of
appeals and, except as modified or set aside on such review, would be
finally determinative of the tax liabilities in issue.  This procedure
remains to this day.  Old Colony Trust Co., 279 U.S. at 722.  This
Court held those procedures constitutional in Old Colony Trust Co. and
Phillips v. Commissioner, 283 U.S. 589 (1931).

   /32/ Petitioners suggest that holding the Tax Court to be an
Executive Department after 1969 would "override Congress' considered
judgment." Pet. Br. 30.  Petitioners' only support for this statement,
however, is not an Act of Congress but passages in a report prepared
by the staff of the Senate Finance Committee.  S. Rep. No. 552, supra,
at 302-304 & n.3.  The Finance Committee was apparently misled by the
"legislative court" appellation into thinking that Article I courts
are part of the Legislative Branch.  This Court's decision in Chadha
makes clear, if it was not clear before, see pp. 33-35, supra, that
the Tax Court cannot be within the Legislative Branch.  The important
point is that Congress did not by statute purport to remove the court
from the Executive Branch.  Since any such effort would violate the
Constitution, such an intent should not be attributed to Congress on
the basis of dubious legislative history.  Cf. West Virginia
University Hospitals, Inc. v. Casey, No. 89-994 (Mar. 19, 1991), slip
op. 14-15.

   /33/ The legislative history of the 1969 amendments suggests that
Congress contradictorily intended both to distance the Tax Court from
the Executive Branch and to keep it outside the Judicial Branch.  See
S. Rep. No. 552, supra, at 302-304 & n.3.

   /34/ See Amar, Marbury, Section 13, and the Original Jurisdiction
of the Supreme Court, 56 U. Chi. L. Rev. 443, 451 (1989) ("strictly
speaking, 'legislative courts' are neither legislative nor courts;
rather, they are executive agencies").  Amicus Erwin N. Griswold
similarly is content to establish the Tax Court as an Article I court,
without explaining what the consequences of such a designation are for
the Tax Court's placement in the tripartite system.  However many
"attributes * * * indicative of a court" the Tax Court may have,
Amicus Br. 2, it lacks the key constitutional indicia of an Article
III court.  Recognizing this fact does not "undervalue" the Tax Court,
Amicus Br. 22, because the branches of government are equal and
coordinate, rather than arranged in some hierarchical fashion.

   /35/ The cabinet level departments described in Germaine and Burnap
as "Departments" of the Executive Branch were the only departments
created by the first Congress.  Act of July 27, 1789, ch. 4, Section
1, 1 Stat. 28 (Foreign Affairs);  Act of Aug. 7, 1789, ch. 7, 1 Stat.
49 (War);  Act of Sept. 2, 1789, ch. 12, Section 1, 1 Stat. 65
(Treasury);  Act of Sept. 15, 1789, ch. 14, Section 1, 1 Stat. 68
(renaming Foreign Affairs Department of State).

   The first so-called "independence" agency -- i.e., independent of
other entities in the Executive Branch, emphatically not independent
of the Executive -- was not established until 1887.  See Interstate
Commerce Act of 1887, ch. 104, Section 2, 24 Stat. 379;  R. Pierce, S.
Shapiro & P. Verkuil, Administrative Law and Process 99 (1985).  It
was not until the 1930s, during President Roosevelt's first term, that
such agencies became a significant element in the structure of the
Executive Branch.  See id. at 32-33, 97-101.

   /36/ Even if petitioners' interpretation were correct, "Department"
may have a different meaning in the Twenty-fifth Amendment than it
does in the Appointments Clause, just as it carries a different
meaning in the Necessary and Proper Clause, Art. I, Section 8, Cl. 18.
than it does in the Appointments Clause.

   /37/ In addition to the Tax Court, non-Article III courts include
the original Court of Claims (prior to 1953), Glidden, 370 U.S. at
531-532 (plurality opinion);  see Williams v. United States, 289 U.S.
553 (1933);  the current Claims Court, 28 U.S.C. 171;  the Court of
Military Appeals, 10 U.S.C. 941;  courts in the District of Columbia,
see Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458
U.S. 50, 65 (1982) (plurality opinion);  various district courts
(e.g., the United States District Court for the Virgin Islands, 42
U.S.C. 1611-1617);  and, most recently, the Court of Veterans'
Appeals, Act of Nov. 18, 1988, Pub. L. No. 100-687, Section 301, 102
Stat. 4113 (codified at 38 U.S.C. 4051).

   /38/ With respect to administrative law judges, that conclusion
rests on linguistic sleight-of-hand, Pet. Br. 39 n.37 -- an irrelevant
legislative use of the term "presiding employees" in the
Administrative Procedure Act, 5 U.S.C. 554(d), 556(b) and (c), 557(b).
 See Buckley v. Valeo, 424 U.S. at 128 n.165 (ignoring Congress's
designation of status of Comptroller General as a "legislative
officer").  It bears noting that the definition of "Employee" later in
Title 5 includes "officers." 5 U.S.C. 2105(a).

   /39/ See also H. Storing, The Complete Anti-Federalist 2.8.173-176
(1981) (Federal Farmer, No. 14, Jan. 17, 1788) ("We may fairly
presume, that the judges, and principal officers in the departments,
will be able well informed men in their respective branches of
business;  that they will, from experience, be best informed as to
proper persons to fill inferior offices in them;  that they will feel
themselves responsible for the execution of their several branches of
business, and for the conduct of the officers they may appoint
therein.  -- From these, and other considerations, I think we may
infer, that impartial and judicious appointments of subordinate
officers will, generally, be made by the courts of law, and the heads
of departments.").

   APPENDIX