501 U.S. 868 (1991)
In 1969 Congress established the United States Tax Court as an Article I court of record and authorized it to appoint commissioners, later renamed special trial judges, to assist its judges.1 The Tax Court consists of nineteen judges appointed by the President with Senate confirmation to fifteen-year terms.2 In 1984 and 1986 Congress expanded the Chief Judge's authority to assign special trial judges to hear four categories of proceedings, including any other proceeding the Chief Judge may designate, though only regular Tax Court judges may enter final decisions in the fourth category.3
Several petitioners deducted approximately $1.5 billion in losses from a tax shelter scheme on their federal income tax returns.4 In March 1982 they petitioned the Tax Court for review of deficiency determinations. Their cases were assigned to Tax Court Judge Richard C. Wilbur and trial began in 1984.5
Judge Wilbur became ill in November 1985. The Chief Judge assigned Special Trial Judge Carleton D. Powell to preside over the trial as evidentiary referee with proceedings videotaped.6 When Judge Wilbur retired effective April 1, 1986, the cases were reassigned to Judge Powell with petitioners' consent for preparation of written findings and an opinion.7
Judge Powell concluded that the tax shelter consisted of sham transactions and that petitioners owed additional taxes. The Chief Judge adopted Judge Powell's opinion as the opinion of the Tax Court.8 Petitioners appealed to the Court of Appeals for the Fifth Circuit, which affirmed the Tax Court's decision.9
Petitioners contended on appeal that assignment of their complex cases to a special trial judge exceeded statutory authority and violated the Appointments Clause.10 The Fifth Circuit held that the constitutional claim could be raised for the first time on appeal but rejected it on the merits, finding waiver by consent.11 The Supreme Court granted certiorari to address the statutory and constitutional questions.12
Whether 26 U.S.C. § 7443A(b)(4) authorizes the Chief Judge of the Tax Court to assign any Tax Court proceeding, including complex cases involving over $10,000, to a special trial judge for hearing and preparation of proposed findings and an opinion?13
Section 7443A(b)(4) states that the Chief Judge may assign any other proceeding to a special trial judge for hearing and preparation of proposed findings and an opinion.14 The actual decision is rendered by a regular Tax Court judge.15 The statute's text contains no limiting term restricting its reach to minor or simple cases.16 Legislative history confirms Congress knowingly removed any jurisdictional maximum amount in dispute to expand this authority.17
Yes. The plain language of subsection (b)(4) is unambiguous and permits assignment of any proceeding regardless of complexity or amount.18 In this litigation the Chief Judge assigned petitioners' cases involving a $1.5 billion tax shelter deduction to Special Trial Judge Powell after Judge Wilbur's illness forced retirement.19 The Chief Judge later adopted Powell's proposed findings as the Tax Court opinion.20
The legislative history of the 1984 amendment shows Congress intended to allow the Chief Judge to assign any proceeding for hearing and proposed opinions so long as a Tax Court judge enters the final decision.21
Section 7443A(b)(4) authorized the Chief Judge to assign petitioners' cases to Special Trial Judge Powell.22
Whether petitioners waived their Appointments Clause challenge to the assignment of their cases to a special trial judge by consenting to that assignment and failing to raise the objection at trial?23
Although a litigant generally must raise all issues at trial, the Court has discretion to consider nonjurisdictional structural constitutional objections such as Appointments Clause challenges on appeal.24 This discretion applies when the objections go to the validity of the proceeding itself and are neither frivolous nor disingenuous.25
No. Petitioners expressly consented to the reassignment to Judge Powell and did not raise the constitutional claim until appeal to the Fifth Circuit.26 The Supreme Court exercised its discretion to reach the claim because the alleged defect in the special trial judge's appointment goes to the validity of the Tax Court proceeding that forms the basis for the litigation.27 The claim implicates the constitutional plan of separation of powers.28
Petitioners' consent and failure to object below did not bar Supreme Court review of the Appointments Clause claim.29
Related opinions on this issue
Justice Scalia would have refused to entertain the forfeited claim.30 He reasoned that Appointments Clause claims have no special entitlement to review.31 A party forfeits the right to advance on appeal a nonjurisdictional claim, structural or otherwise, that he fails to raise at trial.32
In his view the structural nature of the claim is not itself an exceptional circumstance justifying disregard of the forfeiture.33 This is especially true where petitioners expressly consented to the assignment and could have raised the issue easily under the statute's broad discretion.34
Whether a special trial judge of the Tax Court is an 'inferior Officer' of the United States whose appointment must comply with the Appointments Clause?35
Any appointee exercising significant authority pursuant to the laws of the United States is an inferior officer whose appointment must conform to the Appointments Clause.36 The office must be established by law with duties, salary, and means of appointment specified by statute.37 The officer must perform more than ministerial tasks.38
Yes. The office of special trial judge is established by law with duties, salary, and appointment specified by statute. Special trial judges take testimony, conduct trials, rule on the admissibility of evidence, and enforce discovery orders.39 They thereby exercise significant discretion even when they prepare only proposed findings in category (b)(4) cases.40 The fact that they may decide cases outright under subsections (b)(1), (2), and (3) confirms their status as inferior officers for all their duties.41
Special trial judges are inferior officers whose appointments are subject to the Appointments Clause.42
Whether the Chief Judge of the Tax Court may constitutionally appoint special trial judges because the Tax Court qualifies as a 'Court of Law' under the Appointments Clause?43
The term Courts of Law in the Appointments Clause is not limited to Article III courts.44 Article I courts that exercise the judicial power of the United States exclusively qualify as Courts of Law.45 They must remain independent of the Executive and Legislative Branches.46 They must perform functions closely resembling those of district courts.47
Yes. The Tax Court was established to interpret and apply the Internal Revenue Code in disputes between taxpayers and the Government.48 It thereby exercises a portion of the judicial power of the United States.49 It possesses quintessentially judicial powers such as punishing contempt, granting injunctive relief, ordering refunds, and subpoenaing witnesses.50
Its decisions are reviewed by courts of appeals in the same manner as district court decisions.51 They are not subject to review by Congress or the President.52 These characteristics distinguish the Tax Court from executive agencies and permit its Chief Judge to appoint inferior officers.53
The Tax Court is a Court of Law, so the Chief Judge may constitutionally appoint special trial judges.54
Related opinions on this issue
Justice Scalia concurred in the judgment but disagreed that the Tax Court is a Court of Law.55 He maintained that the phrase the Courts of Law refers only to Article III courts whose judges enjoy life tenure and undiminishable salary.56 In his view the Tax Court exercises executive power as an independent establishment within the Executive Branch.57
The Chief Judge therefore qualifies as the head of a Department who may appoint inferior officers under the Appointments Clause.58