United States v. Guy W. Capps, Inc.
204 F.2d 655, 1953 U.S. App. LEXIS 4020 (1953)
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Rule of Law:
The President may not enter into an executive agreement that conflicts with a prior act of Congress. When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb.
Facts:
- In 1948, the United States government established a price support program to purchase surplus potatoes from American farmers to maintain a parity price.
- To prevent this program from being undermined by Canadian imports, the U.S. Acting Secretary of State entered into an executive agreement with the Canadian Ambassador on November 23, 1948.
- Under the agreement, Canada agreed to issue export permits for seed potatoes only if the U.S. importer provided an assurance that the potatoes would not be diverted for table stock (food) purposes.
- In return, the U.S. agreed not to impose quantitative limitations or fees on Canadian potatoes.
- In December 1948, Guy W. Capps, Inc., knowing of the agreement, contracted with a Canadian exporter to purchase a large quantity of Canadian seed potatoes.
- Capps represented to the U.S. Department of Agriculture and the Canadian exporter that the potatoes were being imported for seed use in Florida and Georgia.
- While the potatoes were in shipment, Capps sold the entire load to the Atlantic Commission Company, an agent for the Great Atlantic & Pacific Tea Company, a retail grocery chain.
- The potatoes were subsequently sold on the open market for consumption as table stock, with no restrictions.
Procedural Posture:
- The United States sued Guy W. Capps, Inc. in U.S. District Court to recover damages for an alleged breach of contract.
- The District Court denied Capps' motion to dismiss the action.
- After a trial, the District Court judge directed a verdict for the defendant, Capps, finding no sufficient showing of breach or damages.
- The United States (appellant) appealed the judgment to the U.S. Court of Appeals for the Fourth Circuit.
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Issue:
Does an executive agreement regulating foreign imports exceed the President's constitutional authority when it contravenes the specific procedures established by a federal statute for that purpose?
Opinions:
Majority - Parker, Chief Judge
Yes. The executive agreement is void because it contravenes a federal statute and exceeds the President's constitutional powers. The Agricultural Act of 1948 established a specific procedure for the President to follow when imposing limitations on imports that interfere with agricultural programs, requiring an investigation and recommendation by the U.S. Tariff Commission before the President could act. The executive agreement completely bypassed this congressionally mandated procedure. While the President has inherent powers, the power to regulate foreign commerce is expressly vested in Congress. The President's duty to see that the laws are faithfully executed does not permit him to act contrary to laws enacted by Congress. Citing Justice Jackson's concurrence in Youngstown Sheet & Tube Co. v. Sawyer, the court reasoned that the President's power is at its 'lowest ebb' when his actions are incompatible with the will of Congress. Because the executive agreement was void as against public policy, the contract based upon it is unenforceable in U.S. courts.
Analysis:
This case is a significant application of the separation of powers doctrine, particularly the framework established in Youngstown Sheet & Tube Co. v. Sawyer. It clarifies that the President's authority to conduct foreign affairs through executive agreements is not absolute and cannot be used to circumvent domestic law enacted by Congress. The decision firmly places the power to regulate foreign commerce with the legislative branch, reinforcing that when Congress has created a specific statutory scheme, the executive branch must follow it. This precedent limits the President's ability to use executive agreements as a tool of trade policy when it would conflict with existing federal statutes.
