(The letter of May 19, 1959, to Mr. Durfee, Chairman, CAB, and his reply acceptance of May 28, 1959, follow :) Hon. JAMES R. DURFEE, Chairman, Civil Aeronautics Board, MAY 19, 1959. DEAR MR. DURFEE: Following a conference on May 18, 1959, attended by the general counsel of each of the six major regulatory commissions and members of our subcommittee staff, arrangements have been made for a panel discussion concerning four administrative process problems at hearings to be held before the subcommittee commencing on June 15. Enclosed is an outline of these arrangements and a statement of the four topics to be discussed. The subcommittee would like to have you, or a member designated by you, to appear as a panel participant on the date assigned to your agency. We should also like to have as participants your general counsel, a hearing examiner to be designated by you, and your technical staff chief. It is understood that the views to be expressed may or may not reflect the official position of the Board. The subcommittee, although interested in the official position of your Board, desires at this time to have the benefit of a free and objective presentation of different viewpoints by qualified persons. By such course we hope that our panel hearing will result in a constructive contribution toward solving the difficult administrative problems involved. Your cooperation in this matter will be appreciated. Sincerely yours, OREN HARRIS, Member of Congress, Chairman. Hon. OREN HARRIS, CIVIL AERONAUTICS BOARD, Washington, D.C., May 28, 1959. Chairman, Special Subcommittee on Legislative Oversight of the Committee on Interstate and Foreign Commerce, House Office Building, Washington, D.C. DEAR CONGRESSMAN HARRIS: This will acknowledge receipt of your letter, dated May 19, 1959, advising that a panel discussion concerning four administrative process problems has been scheduled at hearings before the Special Subcommittee on Legislative Oversight commencing on June 15, 1959, and enclosing an outline setting forth the arrangements that have been made for the program and a statement of the four topics to be discussed. I shall be happy to participate as a panel participant on the date assigned to the Civil Aeronautics Board. I also have instructed the General Counsel, the Chief Examiner, and the Director, Bureau of Air Operations, to participate in the panel discussion. Set out below are the names of the individuals who will prepare and present written statements with respect to each of the four topics listed on pages 2 and 3 of the outline of the panel discussion attached to your letter of May 19, that will be discussed as they affect the Civil Aeronautics Board on June 15: Topic I: Mr. Franklin M. Stone, General Counsel. Topic II: Mr. Francis W. Brown, Chief Examiner, Bureau of Hearing Topic III: Mr. James R. Durfee, Chairman, Civil Aeronautics Board. It is my view that the scheduled panel discussion is an excellent idea and that the discussions will be of interest and assistance to all concerned with the problems involved in the administrative process. In accordance with your request, the written statements prepared on the four topics and any oral statements made by members of the Board's staff and myself will represent our own individual views rather than the position of the Board. You may be assured that the designated members of the Board's staff and I will cooperate in every possible way to make the panel discussion informative and successful. Sincerely yours, JAMES R. DURFEE, Chairman. Mr. DURFEE. The gentlemen who are here today representing the practicing attorneys are attorneys who are legal counsel for airlines, and representatives of the airlines themselves, who were among the names which we submitted in extenso and I think they represent by a rather wise choice the rather wide variety of specialization of the regulatory process. But in brief, I am James R. Durfee, Chairman of the Civil Aeronautics Board. On my right is Mr. Stone, Frank Stone, the General Counsel of our Board. On my left is Mr. Francis Brown, our Chief Examiner. Mr. Stone will discuss the first subject which has been assigned for this panel discussion, item No. I. Mr. Brown will discuss item No. II, as our Chief Examiner, the role of hearing examiners. I, as Chairman, will discuss item III, the role of Commissioners and their immediate staffs and agency staffs, and the division of responsibilities. Mr. M. C. Mulligan, Chief of our Bureau of Air Operations, the largest bureau within the agency, will discuss the question of the efficiency of the commissions, question No. IV. If the Chair wishes, I can continue with introductions, or the other gentlemen can identify themselves. The CHAIRMAN. We will ask the other gentlemen to identify themselves. Mr. BURT. I am Mr. William C. Burt. I am an attorney in practice here before the Civil Aeronautics Board, representing various airlines. The CHAIRMAN. And your address? Mr. BURT. Wyatt Building, Washington, D.C. Mr. H. T. BROWN. I am H. Templeton Brown. I am a hybrid participant in this panel discussion. I am a practicing attorney. My firm is general counsel for United Airlines. I also sit as a director of that company, so that in that sense I am a company representative. My address is 231 South LaSalle, Chicago, Ill. Mr. DE VOURSNEY. I am Andrew M. de Voursney. I am vice president and treasurer of United Airlines. My address is 5959 South Cicero Avenue, in Chicago. Mr. PIRIE. My name is John C. Pirie. I, too, am a hybrid participant. I have been a practicing attorney before the Board for a great many years. I am currently vice president and associate general counsel of Pan American World Airways, Inc. My address is 135 East 42d Street, New York City. Mr. LEAR. My name is Coates Lear. I am a practicing attorney, and my address is the Cafritz Building, Washington. Mr. WESTWOOD. My name is Howard C. Westwood. I am a member of the firm of Covington & Burling, a law firm here in Washington, the address of which is 701 Union Trust Building. My firm frequently represents American Airlines in proceedings before the CAB. Mr. VERNER. My name is James M. Verner, a member of the firm of Tierney & Tierney, 2001 Massachusetts Avenue, Washington, D.C., which practices largely before the Civil Aeronautics Board and the Interstate Commerce Commission. The CHAIRMAN. Gentlemen, we have 2 full hours. We are going to give most of it to you. On June 16, we are having similar panel participation dealing with the Federal Communications Commission; on June 17, the Federal Power Commission; on June 18, the Federal Trade Commission; on June 19, the Interstate Commerce Commission; and on June 22, the Securities and Exchange Commission. On June 23 and 24, we will have 2 days of general roundup discussion participated in by representatives of bar associations, trade associations, and of the Federal Trial Examiners' Conference. During the 6 days that we have the commissions before us, topics I and II will be discussed in the morning session and topics III and IV in the afternoon session. On June 23, topics I and II will be discussed; and, on the 24th, topics III and IV will be discussed. We will have presented by representatives of the commissions a short written paper concerning each of the four topics; following which there were be discussion and questioning by the panel participants and members of the subcommittee. Other panelists who have prepared papers may orally summarize them and the text will be included in the record. The subcommittee will be glad to receive from any panelist a short written statement concerning any of the assigned topics. This should be submitted on or before July 10, 1959. In this way, we shall ascertain the viewpoint of persons who are engaged daily in the workings of each of the administrative commissions. It is a privilege and a pleasure to welcome today Hon. James R. Durfee, Chairman of the Civil Aeronautics Board; Francis W. Brown, Chief Examiner; M. C. Mulligan, Director, Bureau of Air Operations; Franklin M. Stone, General Counsel. It is also a privilege and a pleasure to welcome the following attorneys who practice before the Board: Coates Lear, Esq.; James M. Verner, Esq.; Howard C. Westwood, Esq.; and William C. Burt, Esq. We are also privileged to have present with us representatives of some of the airlines regulated by the Board: Mr. H. Templeton Brown, of United Airlines; Mr. Andrew M. DeVoursney, of United Airlines; and Mr. John C. Pirie, of Pan American World Airways. Again I say we are thankful and look forward to receiving the benefit of the experience and wisdom of the gentlemen who are before us as participants in a panel discussion of matters profoundly affecting the public interest in administration of law by commissions. Mr. Durfee, the Chairman of the Civil Aeronautics Board, we thought, would be appropriate to start off the discussions. Since Mr. Stone will discuss the initial topic, we will recognize him at this time. Mr. STONE. Mr. Chairman, the topic is: What legislative or administrative measures have been or should be taken to preclude attempts to influence Commission members or employees by means which do not afford a fair opportunity to interested persons materially affected by Commission action to present their case and, at the same time, preserve the necessary access by the Commission to information from the public, the regulated industry, and others? The problem of assuring "fair play" to the contestants in administrative proceedings is one that has come to be recognized as involving more than adherence to judicial standards of conduct in the con ventional adjudicatory or quasi-judicial proceeding. In this respect, much credit is due to the initiative of this committee in conducting extensive hearings in 1958 which probed deeply into the practices of the administrative agencies. The distinction in the Administrative Procedure Act between adjudication and rulemaking may no longer suffice to form a proper basis for determining which proceedings require special safeguards against undue influence. In adjudication proceedings, as defined in the Administrative Procedure Act, the administrative agencies were equated to courts, and, in a general sense, the high standards of conduct recognized as proper in orthodox judicial proceedings were expected to apply. Rulemaking proceedings under the Administrative Procedure Act are in general not subject to these standards. What was overlooked was that some types of proceedings which are "rulemaking" under the definition in the Administrative Procedure Act are, nevertheless, adversary in nature and call for the same principles of "fair play" to all concerned as are applied to strictly adjudicatory proceedings. This was recently brought out in the decision in Sangamon Valley Television Corporation v. U.S., decided by the Court of Appeals for the District of Columbia on May 8, 1959. I might mention here, however, that there is a vast distinction between the rulemaking powers of the Board and the rulemaking powers of the Federal Communications Commission. Generally speaking, I would think that the Board's rulemaking function is more legislative in nature than that of the Federal Communications Commission and that the Sangamon case has more pertinence to Federal Communications Commission proceedings than to Civil Aeronautics Board proceedings. Two basic questions seem to me to be presented: (1) Are the existing provisions governing adjudication proceedings adequate; and if not, how can they be improved? (2) To what extent should the standards governing adjudication proceedings be extended to rulemaking proceedings? In approaching these two stated questions and attempting to formulate answers thereto, a number of factors must be taken into consideration. While we all agree with the principle of fair play, it must be kept in mind that although certain agencies that operate under the Administrative Procedure Act are equated to courts as being quasijudicial in nature, these agencies are not courts. The operations of these agencies include functions of a quasi-legislative nature. Some of these agencies are charged with promotional responsibilities to foster and develop the particular industry that they regulate. These agencies are not organized or designed to operate as courts. As a matter of fact, these agencies were created because the courts were not organized in a manner that would enable them to effectively cope with the detailed, voluminous, and complex problems of particular industries. It was recognized and contemplated that these administrative agencies would to some extent rely on their "expertise" in making decisions and would not be restricted by strict judicial standards from obtaining pertinent information. Perhaps the administrative agencies have in varying degrees strayed too far from judicial standards. Perhaps the time has come to restrict, or even change the fundamental character of, the administrative agencies. But I hope that the broad public interest considerations are recognized and carefully weighed before any legislation is enacted that would judicialize the agencies to such an extent that they would be placed in a straitjacket of common law rules of evidence. Perhaps what I am saying is that possibly the rules of evidence should remain fairly discretionary and flexible, even at the risk of violating traditional legal standards of admissible evidence in order to best serve the public interest, as distinguished from the interests of parties immediately concerned with a particular issue under consideration by the agency involved. The Board has given long and comprehensive study to these questions. While the Board's existing regulations are not perfect in every respect, I believe they are regarded as generally adequate. Indeed, our regulations have been referred to by the Celler committee as an example for other agencies to follow. Nevertheless, the Board is studying and will continue to monitor this situation and will make revisions as may appear to be necessary. If as a result of these discussions it appears desirable to revise our code, I am confident the Board will move promptly to do so. The Board, in testifying before committees of Congress on the "leak" and "pressure" bills-S. 2461 and S. 2462, 85th Congress—and in communications to this committee, letter of December 2, 1958, has pointed out that the Board does have a reasonably good code of ethics. At this point it may be well to refer to just what the Board has done in formulating its present code. In March 1951, the Board adopted principles of practice which are applicable to the Board, to its staff, and to all others persons. In adopting these principles of practice, the Board made it clear that the standing and effectiveness of the Board are directly related to its observance, as well as the parties and attorneys appearing before it, of the highest standards of judicial and professional ethics. The Board's principles of practice point out that in many respects the functions of the Board are similar to those of a court, and parties to cases before it, as well as those who represent such parties, are expected to conduct themselves with honor and dignity. By the same token, the members of the Board, and those of its employees who participate with the Board members in the determination of cases upon a record, are expected to conduct themselves with the same fidelity to standards of propriety that characterizes a court and its staff. The principles of practice are designed to safeguard cases which are decided by the Board after notice and hearing and upon a formal record. They state that in such cases it is improper that there be any private communication on the merits of the case to a member of the Board or its staff. It is likewise improper that there be any private communication on the merits of the case to a member of the Board or to the examiner by any members of the Board's staff who participated in the hearing as witness or as counsel. Moreover, it is improper that there be any effort by any person interested in the case to sway the judgment of the Board by attempting to bring pressure or influence to bear upon the members of the Board or its staff. |