So without me taking any of the time from this program this morning, I think we will start off by first having you identify yourselves so that we can be sure just who all appears this morning. I might as well start with you, Harold, since you are in the middle. I hope you do not misunderstand me with that comment. You happen to be right straight ahead.

MEMBERS OF THE PANEL

RICHARD J. CONNOR, PRESIDENT, FEDERAL POWER BAR ASSOCIATION, WASHINGTON, D.C.

GEOFFREY CREYKE, JR., CHAIRMAN, ADMINISTRATIVE LAW SECTION OF THE DISTRICT OF COLUMBIA BAR ASSOCIATION

JUSTIN FELDMAN, CHAIRMAN, ADMINISTRATIVE LAW COMMITTEE, ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK LEONARD H. MARKS, PRESIDENT, FEDERAL COMMUNICATIONS BAR ASSOCIATION, WASHINGTON, D.C.

ROBERT E. MAY, FORMER CHAIRMAN, FEDERAL POWER BAR ASSOCIATION, WASHINGTON, D.C.

DONALD C. BEELAR, ESQ., WASHINGTON, D.C.

E. GRANVILLE CURRY, ASSOCIATION OF INTERSTATE COMMERCE COMMISSION PRACTITIONERS, WASHINGTON, D.C.

F. TROWBRIDGE vom BAUR, FORMER CHAIRMAN, ADMINISTRATIVE LAW COMMITTEE, FEDERAL BAR ASSOCIATION, WASHINGTON, D.C.

VALENTINE B. DEALE, ATTORNEY, WASHINGTON, D.C.

PETER T. BEARDSLEY, GENERAL COUNSEL, AMERICAN TRUCKING ASSOCIATION, WASHINGTON, D.C.

JOSEPH P. ADAMS, EXECUTIVE DIRECTOR AND GENERAL COUNSEL, ASSOCIATION OF LOCAL TRANSPORT AIRLINES, WASHINGTON,

D.C.

LOUIS P. HAFFER, EXECUTIVE VICE PRESIDENT AND COUNSEL, AIR FREIGHT FORWARDING ASSOCIATION, WASHINGTON, D.C. ROBERT E. LEE HALL, GENERAL COUNSEL, NATIONAL COAL ASSOCIATION, AND SECRETARY, FUELS RESEARCH COUNCIL, WASHINGTON, D.C.

STANFIELD JOHNSON, ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D.C.

HAROLD F. HAMMOND, EXECUTIVE VICE PRESIDENT, TRANSPORTATION ASSOCIATION OF AMERICA, WASHINGTON, D.C.

T. VERNON HANSEN, SOUTHERN STATES COOPERATIVES (TAA), BALTIMORE, MD.

VINCENT T. WASILEWSKI, NATIONAL ASSOCIATION OF BROADCASTERS, WASHINGTON, D.C.

MARC WHITE, COUNSEL, NATIONAL ASSOCIATION OF SECURITIES DEALERS, WASHINGTON, D.C.

STUART G. TIPTON, PRESIDENT, AIR TRANSPORT ASSOCIATION, WASHINGTON, D.C.

J. D. BOND (FCC), HAROLD P. BOSS (ICC), PAUL N. PFEIFFER (CAB), HENRY SAHM (NLRB), JOSEPH ZWERDLING (FPC; PRESIDENT, FTEC), REPRESENTATIVES OF FEDERAL TRIAL EXAMINERS CONFERENCE

Mr. HAMMOND. Mr. Chairman, the Transportation Association is very used to being in the middle and caught between crossfires from time to time.

I am Harold Hammond, executive vice president of the Transportation Association of America.

Mr. HANSEN. I am T. Vernon Hansen, general traffic manager, Southern States Cooperatives, Baltimore.

Mr. WASILEWSKI. I am Vincent Wasilewski, manager of government relations of the National Association of Broadcasters.

Mr. CURRY. My name is Curry. I represent the Association of Interstate Commerce Commission Practitioners.

Mr. Sam Flint unfortunately was unable to be here.

The CHAIRMAN. Yes, Mr. Curry.

Mr. BEARDSLEY. My name is Peter T. Beardsley, general counsel, American Trucking Association.

Mr. TIPTON. I am Stuart G. Tipton, president of the Air Transport Association.

Mr. JOHNSON. I am Stanfield Johnson. I am representing the Association of American Railroads here today.

Mr. PFEIFFER. I am Paul Pfeiffer, a trial examiner; and I am one of the representatives of the Federal Trial Examiners Conference. Mr. SAHм. I am Henry S. Sahm, trial examiner for the National Labor Relations Board, and I might state, Mr. Chairman, that my statement here has me as associated with the Civil Aeronautics Board. I would be very proud to be associated with them, but I am a trial examiner for the National Labor Relations Board and appear here as vice president of the Federal Trial Examiners Conference.

Mr. ZWERDLING. I am Joseph Zwerdling, hearing examiner at the Federal Power Commission, and I appear as president of the Federal Trial Examiners Conference.

Mr. DEALE. I am Valentine B. Deale. I am an attorney in private practice in Washington, D.C., with my own law office.

Mr. BEELAR. I am Donald C. Beelar, attorney in private practice. My firm is Kirkland, Ellis, Hudson, Chaffetz & Masters.

The CHAIRMAN. Mr. Deale, you are with the bar association of the District of Columbia.

Mr. DEALE. Yes, sir; I am a past member of its board of directors and past chairman of its administrative law section, and am and have been a member of that section's counsel for the last several years.

The CHAIRMAN. And Mr. Beelar, you are representing the American Bar Association?

Mr. DEALE. I am not here today in any representative capacity, Mr. Chairman.

Mr. BEELAR. I am the chairman of the ABA Special Committee on the Federal Administrative Practices Act and an officer of the administrative law section, but I understand I am not speaking in a representative capacity today.

The CHAIRMAN. Very well.

Mr. VOM BAUR. My name is F. Trowbridge vom Baur. I am General Counsel for the Navy, but I am not here speaking for the Navy; I guess, just for myself.

Mr. BOND. My name is J. D. Bond. I am a hearing examiner at the Federal Communications Commission. I appear as one of the panelists on behalf of the Federal Trial Examiners Conference.

Mr. CONNOR. I am Richard J. Connor, and I appear here as president of the Federal Power Bar Association.

Mr. FELDMAN. I am Justin N. Feldman. I am chairman of the Administrative Law Committee of the Association of the Bar of the City of New York.

Mr. MARKS. I am Leonard H. Marks, president of the Federal Communications Bar Association.

Mr. MAY. I am Robert E. May, practicing attorney, principally before the Federal Power Commission. Last year I had the honor of being the president of the Federal Power Bar Association.

Mr. ADAMS. I am Joseph P. Adams, executive director and general counsel of the Association of Local Transport Airlines.

Mr. HALL. I am Robert E. Lee Hall, general counsel of the National Coal Association. I am also chairman of the mineral and natural resources law section of the American Bar Association, but do not appear here on behalf of that organization.

The CHAIRMAN. Thank you, gentlemen.

Did we miss anyone? I believe not.

Mr. Curry, you and Mr. Hall have both participated already, as has Mr. May-and has anyone else?-in these discussions, and therefore you are familiar with the nature of this program by your own experience.

I think probably to lead off this morning if we will let Mr. Tipton give a brief discussion on topic I, we might then open this up to discussion by the panel.

Mr. TIPTON. Mr. Chairman, I would be very glad to do that. I have a prepared statement and I think I can be briefest by reading it. The CHAIRMAN. Very well.

Mr. TIPTON. Without further introduction to topic I, with which we are all familiar, the solution of the problem presented in this topic is just as hard as it is important.

It is not difficult to understand, to announce, and to enforce the notion that it is wrong to address ex parte communications to a court. The applicability of this rule is well understood, and the rare and limited exceptions to the rule are also well understood. Practice before

the courts is limited almost entirely to lawyers, who by long tradition are officers of the court and bound to obey its written and unwritten rules.

On the other hand, administrative agencies have few of the attributes of a court, and the mixture of functions and responsibilities vested in a typical administrative agency make inapplicable the simple and well understood rules applying to the relationship between court and counsel.

Members of administrative agencies are supposed to be experts in their fields, and are not required to achieve their expertness through review of records made in administrative hearings. In a general sense, they are to gain their knowledge of the industry where they find it, with no rules to impede or restrict their efforts to become and continue to be thoroughly acquainted with the industry they regulate.

This general attitude on the part of an administrative agency is particularly important in dealing with an industry such as the one I represent because it is constantly marked by rapid change, changes which necessarily affect the regulatory approach which must be taken by the agency. Those changes must be recognized and constantly watched or the agency will fall behind its industry.

While the knowledge thus gained will and should be brought to bear on every case decided, there are, of course, many types of cases before administrative agencies when the decision must be made after hearing and upon a record. Here the answer to the question is reasonably easy. Ex parte communication going to the merits of the case being tried are inappropriate and should not be tolerated.

But this does not settle the matter either, because there are many cases dealt with by administrative agencies which do not fall in this category and yet have characteristics which make ex parte communications just as inappropriate as if a hearing and record were required. Recently a case was dealt with before the Civil Aeronautics Board under the general heading of rulemaking. It involved the right of Qantas Airways to transport certain traffic across the United States. The proposal was vigorously advocated by Qantas, and just as vigorously opposed by the Air Transport Association and a number of U.S.flag airlines.

In this case I believe it would have been appropriate for the Board to prescribe that the case be decided solely on the basis of public argument.

On the other hand, in many rulemaking proceedings the Board would be unduly hampered if that kind of a rule were to be imposed. If the Board is seeking to prescribe the proper method of accounting for spare parts, the members of the Board should be free to get information regarding the practical handling of spare parts in stockrooms and maintenance shops from any source they care to.

Thus, it is not possible in legislating on the subject of ex parte communications to designate one general type of proceeding, to prohibit such communications, and leave it at that. Nor is it possible to prescribe in a general way the proceedings which are subject to the prohibition. Criminal sanctions would be imposed for violation of the legislation, and for that reason the standards of conduct must be described with great clarity.

If this is not done, two results will follow, either one of them bad.

The law will not be enforced because of constantly recurring inequities, or if there is a determination to enforce it in accordance with its terms, the relationship between the industry and the regulatory agency will be so stiff and rigid that the agency will be deprived of knowledge of the industry other than that painstakingly secured from a written record.

Another difficult set of problems relates to the persons to whom these prohibitions should apply, what persons should be forbidden to make ex parte communications and what persons should be prohibited from receiving them.

It seems to me that with the exceptions I will mention in a moment, these problems are handled about as well as they can be handled in H.R. 6774. That bill prohibits "any person" from making ex parte communications "with intent to influence the consideration or decision of a proceeding."

This presents one difficulty. It either proscribes too much or too little, depending upon whether the phrase "any person" includes the staff of the agency concerned. If that phrase includes the staff, then literally the agency members would have to work alone on the decision. If it does not include the staff, it would permit those staff members who have been adversaries in the proceeding to continue to argue their position in secret.

Without attempting at this time to propose a concrete amendment to deal with this subject, it seems to me that it would be appropriate to provide that the broad prohibition in H.R. 6774 not include the staff of a regulatory agency except that portion of the staff which has taken a position in the proceeding concerned. If a portion of the staff has taken a position, the rules for them should be the same as the rules for industry litigants.

Now, as to those receiving ex parte communications, here again H.R. 6774 provides a point of departure. It prohibits ex parte communications to an agency member or hearing officer who is or will be involved in the decision in the proceeding. This would probably work if it were expanded to include the member's personal staff as well as himself.

All this leads me to several conclusions:

I believe there should be Federal legislation on this subject. The authority of Congress is necessary to make the legislation effective. It should be carefully framed to prevent ex parte communications in those cases where such a prohibition is appropriate while giving the agency ample leeway to become expert in the industry regulated. The legislation must provide clear standards of conduct.

These objectives can be accomplished by prohibiting ex parte communications in cases which are required to be decided after hearing and upon a record, and such other cases as may be designated for such treatment by the agency at the outset of the proceeding.

By making a designation of this kind, the agency can resolve all doubts as to the standards of conduct to be followed in the designated proceeding, doubts that very properly exist because of the wide variety of proceedings and the different methods of handling them. Such designations permit the Board to choose those cases where fairness and expedition require a record or public argument, and those cases where better decisions can be made without the rigidity necessarily involved in the application of such rules.