I would say or suggest one solution which may be a step toward Mr. Springer's dilemma about where you draw the line, and that is that instead of attempting to draw the line by a congressional act maybe the commissions themselves could draw the line specifically. I would suggest that it might be possible for the Civil Aeronautics Board in any preceeding in which we are instituting an investigation, any proceeding in which the Board orders the institution of a proceeding that the Board then itself determine is this the type of proceeding in which we should receive ex parte communication, in which we feel we can with propriety receive communications because they do not affect a contested adjudicatory case, that they would not really violate the priciple of due process. Or is it a proceeding in which the Board feels it cannot receive ex parte communications. I think if at the outset of every proceeding the Civil Aeronautics Board specifically was to say "This Board considers this case so involves the private rights of parties who may be affected whether it be rulemaking or adjudication that we will not receive ex parte communications or if it was in the proper area I think we can say "We will receive ex parte communications." At least the ground rules would be clear for that case.

The CHAIRMAN. That is what we are trying to do in H.R. 4800 and give leeway for the Commission or Board to make such exceptions as they feel it is absolutely necessary in administration of the pro

grams.

Mr. SPRINGER. Just that one point there, to clarify, lies, I take it, then, two things, Mr. Chairman. You feel that you could clear up this problem of yours by a rule of the Commission with reference to this or redrawing your rules to take care of this division line by some rule that would be satisfactory, am I right? That is a recommendation which I take it you are possibly making at this time?

Mr. DURFEE. I am not suggesting that this be the entire solution to the problem of ex parte communications, how they should be dealt with. I believe they should be dealt with more specifically by the Congress itself than they have been up to now. I have testified before other committees of the Congress to this effect. I have even urged that legislation, penal legislation be enacted in this specific area which is not on the books today.

Mr. SPRINGER. That is all, Mr. Chairman.

Mr. DURFEE. I do think in this specific area the point you made of the line of demarcation, where it is right or wrong, the Board could draw this line itself. If the chairman prefers to give the power to the agency to define the line of demarcation in this particular case, because there are no two cases the same. I think it would be very difficult for this Congress as far as you have gone now into the Administrative Procedure Act, the adjudicatory and the rulemaking procedure, there is a vast gray area in between. I think it would be very difficult for the Congress, by legislative fiat, to draw this line. I think the agency could.

Mr. SPRINGER. What would you have us to do, then, Mr. Chairman? Mr. DURFEE. The agency on an ad hoc basis, a case-by-case basis could resolve that itself.

Mr. SPRINGER. Let me get this straight. What you would have us do is lay the ground rules and then you would fill in this demarcation line, am I right?

Mr. DURFEE. Yes, sir.

Mr. SPRINGER. And we would supply the penalties, is that correct? Mr. DURFEE. Yes, sir.

Mr. SPRINGER. That is all, Mr. Chairman.

Mr. DURFEE. I certainly would not suggest that the committee stop there by just saying, "We are going to define some ground rules and the Board apply them with a line of demarcation." To get into which side of the line you are on I think there is a very definite place for congressional action.

The CHAIRMAN. The House is starting in session and we have some bills out of this committee that we must get over there to take care of. The suspension is for all the afternoon and then the general debate starts on the foreign aid program. Therefore, it will be impossible for the committee to sit this afternoon.

In the morning I expect to come back promptly at 9:30 and for 1 hour additional. In view of the fact this is the initial hearing, probably it takes more time than we will later on, but for 1 hour we will give an opportunity to discuss the other four points that were on the agenda. At 10:30 we will have to move into the other agency because as it is today there are a number of people throughout the country that are going to be in here, that we must get to them while they are here. With the thanks of the committee, would it be inconvenient for you, Mr. Chairman, for you to be back in the morning or do you have something else the Board has scheduled to require your time then?

Mr. DURFEE. We are awaiting the convenience of this committee. We will be ready to appear any time you want us.

The CHAIRMAN. You always have been very generous and I say very cooperative for which we are grateful.

The committee will stand adjourned until 9:30 in the morning. (Whereupon, at 12:34 p.m., Monday, June 15, 1959, the committee adjourned to reconvene at 9:30 a.m., Tuesday, June 16, 1959.)

MAJOR ADMINISTRATIVE PROCESS PROBLEMS

(Civil Aeronautics Board)

TUESDAY, JUNE 16, 1959

HOUSE OF REPRESENTATIVES,

SPECIAL SUBCOMMITTEE ON LEGISLATIVE OVERSIGHT OF THE HOUSE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The special subcommittee met at 10 a.m., pursuant to recess, in room 1334, New House Office Building.

Present: Representatives Harris (presiding), Rogers of Texas, Flynt, Moss, Springer, Derounian, Devine, Roberts, and Younger.

Also present: Robert W. Lishman, counsel to the subcommittee; Beverly M. Coleman, subcommittee attorney; Herman Clay Beasley, subcommittee clerk; and Jack Marshall Stark, minority counsel. The CHAIRMAN. The committee will come to order.

I intended for the record yesterday to state that Mr. Berwell, of the Independent Airlines, accepted an invitation to participate in the panel discussion. Unfortunately, he was stung by a bee, which caused his eyes, or, at least, one of them, to go shut from the swelling, which made it impossible for him to be with us.

Knowing something about how it feels to be stung by a bee, I sympathize with him. We do hope that he will soon recover, and we regret that he will not be able to be with us.

At the outset, Mr. Durfee, I believe you have furnished us with a copy of the Board's workload for the fiscal years of 1957, 1958, and 1959, together with your organizational chart. This, I think, would be helpful and appropriate for the record. It carries not only the workload, but the personnel and the 1959 appropriation.

In view of the fact that that was mentioned yesterday, without objection, this information will be included in the record.

(This material is reproduced at the end of the Civil Aeronautics Board discussion.)

The CHAIRMAN. At the outset this morning, the second topic will be presented by Mr. Francis Brown, the Chief Examiner.

I also might state that we have been advised by Mr. Westwood that he was called by the courts today, making it impossible for him to be here.

Also, we have just been advised by Mr. Lear that he could not be back with us today because of some urgent appointment this morning. Mr. Brown, you may proceed.

53

MEMBERS OF THE PANEL

CIVIL AERONAUTICS BOARD REPRESENTATIVES: JAMES R. DURFEE, CHAIRMAN; FRANCIS W. BROWN, CHIEF EXAMINER; M. C. MULLIGAN, DIRECTOR, BUREAU OF AIR OPERATIONS; AND FRANKLIN M. STONE, GENERAL COUNSEL

PRACTICING ATTORNEYS: JAMES M. VERNER AND WILLIAM C. BURT, OF WASHINGTON, D.C.

INDUSTRY REPRESENTATIVES: H. TEMPLETON BROWN, UNITED AIR LINES, CHICAGO, ILL.; ANDREW M. DeVOURSNEY, UNITED AIR LINES, CHICAGO, ILL.; AND JOHN C. PIRIE, PAN AMERICAN WORLD AIRWAYS, NEW YORK, N.Y.

Mr. F. W. BROWN. In considering the role of the hearing examiner in our modern system of administrative agencies, it is desirable to review briefly the evolution and development of the examiner.

It is my understanding that the hearing examiner concept had its inception after the adoption of the Hepburn Act in 1907. That congressional enactment resulted in a very sharp increase in the workload of the Interstate Commerce Commission, making it impossible for the Commissioners to conduct all of the proceedings. At that timea number of appointments were made to positions described as attor

ney-examiner.

Parenthetically, I might mention that my father happened to be one of the first four appointed to those positions.

These individuals either conducted hearings individually or with individual Commissioners. Under this system the examiner prepared a report which was not published as his work but which became, with such modifications as the Commission found necessary, the decision of the Commission.

This system continued in effect until about 1918, at which time the Commission put in force the so-called "proposed report" system, under which an examiner prepared and published a report under his own name and which was subject to exceptions. It is interesting to note that the examiners of that day were not generally as enthusiastic as might be expected for the new system because they felt they were being required to "stick their necks out."

In establishing the Civil Aeronautics Board in 1938 the personnel of the Bureau of Air Mail of the Interstate Commerce Commission were transferred to the Board. The examiners of this bureau constituted the original examiners with the Board and it is, therefore, natural that the initial procedure of the Board followed that of the Interstate Commerce Commission.

Except for procedural improvements developed in the Board, there were no substantial changes in the examiner setup until the adoption of the Administrative Procedure Act in 1946. Insofar as the Board was concerned, this did not require substantial changes in procedure since its procedures were not essentially different from those prescribed by the APA.

With the effective date of the APA all of the examiners on the Board's staff received interim appointments subject to qualification

by the Civil Service Commission. In order to assure the highest competence among examiners, the so-called McFarland committeeundertook the task of examining into the qualifications of the incumbent examiners. This task included a painstaking investigation by the Civil Service Commission, a review by the McFarland committee,. and a personal interview with this group. After a long period most of the incumbent examiners received permanent appointment.

In the CAB there are 18 examiners who handle the economic pro-ceedings and 6 who engage in work on safety-enforcement cases. The Board's corps of examiners is vested with many years of experience in the regulatory problems of the aviation industry. Twelve of the economic examiners have served with the Board for 15 years or more. and only one examiner has less than 3 years' service. As a result,. they constitute a reservoir of professional competence in the fields of law and economics which enables analysis in complex areas of regulation to an extent which would be virtually impossible for persons without their training and experience. In the safety-enforcement field, all but one of the examiners have 10 or more years of service with the Board.

It is the role of the hearing examiner to preside at formal hearings. either required by statute or by Board order. At these hearings the record is developed which provides the basis for most of the regulatory work of the Board. Following the hearing, the examiner reviews the entire record and prepares an initial decision setting forth an analysis of the evidence and the legal arguments, conclusions of fact and law,. and his ultimate decision. The examiner directs the course of the proceeding from prehearing conference to the time of his initial decision. Considerable emphasis has been placed on the hearing phase of this work. While a competent, experienced presiding officer is necessary, in my opinion, of even greater importance is the ability to analyze difficult legal and factual problems and to write clearly, concisely, and with logical reasoning, particularly in cases involving extensive economic and statistical data.

Some arrangement for the provision of techincal assistance to the hearing examiner is desirable, particularly in the larger cases. In the economic proceedings there is a tremendous volume of economicdata which must be analyzed. In this area, as well as in the area of legal research, such technical assistance should expedite not only the hearing but also the preparation of the initial decision.

A recent development in the hearing examiner field has, in my opinion, resulted in failure to utilize fully the knowledge, ability, and work of these employees. Soon after formation of the Board, it was concluded that preparation of the opinion by the examiner represented the most efficient procedure. This practice was followed until 1951, at which time the work of opinion writing was assigned to the General Counsel's office. Two reasons were given for this:

(1) To relieve the examiner from this work to facilitate handling of hearings and initial decisions, and

(2) The thought that it would be difficult for an examiner to rationalize a decision differing from his.

While I would not recommend a return to the former system, I do believe that the examiner should be available for consultation with the Board in arriving at its decision. The examiner is the only individual who has lived with the case from prehearing conference to