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Florida Tax Review

Abstract

Perhaps legislative courts are overlooked because they have no clear place in the study of constitutional law; it is Article III of the Constitution that grants the judicial power of the United States to the United States Supreme Court (Supreme Court)and inferior courts such as the United States Courts of Appeals and the District Courts. Yet Article I courts perform the traditional judicial function of resolving controversies by applying the law to the facts and rendering an opinion. In fact, they resemble Article III courts in most respects, except that their judges lack the salary and tenure protections of Article III.

Despite the superficial resemblance to Article III courts, Article I courts lack other features key to judicial power. For example, Article III expressly provides courts with jurisdiction in both law and equity; Article I does not mention law or equity and does not even specifically grant Congress the power to create any court. In 1938, the adoption of the Federal Rules of Civil Procedure eliminated the distinction between law and equity in Article III courts, but those rules do not apply in the United States Tax Court. Does the Tax Court have equitable powers? Should it? Given the importance of the Article I courts in adjudicating public rights, it is surprising how uncertain and unclear the limits on their power are.

The United States Supreme Court has held that the Tax Court’s predecessor court lacked equitable powers. That could end the inquiry. Yet, the Tax Court increasingly has used equitable doctrines in deciding cases in ways contrary to the result indicated by a straightforward application of applicable statutes. Public choice theory teaches that judges may seek to maximize their power by expanding the jurisdiction of their courts and through decisions that go beyond the governing statutes. The Tax Court’s application of equity reflects both of these tendencies.

To elucidate the limits Article I of the Constitution places on legislative courts, this article considers the question of the extent, if any, of the equitable powers of the Tax Court under Article I.

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