order presumptively correct and its decision entitled to great weight. The significant quotation from page 908 of the decision follows: "[7,8] It would seem unnecessary to reiterate that presumptively the Board's order is correct and, under any and all circumstances, its decision entitled to great weight. We think it clear that it cannot be said that the board has failed to make adequate findings in this case, where it is dealing largely with an experimental undertaking. The language of the Supreme Court in Railroad Commission v. Rowan & Nichols Oil Company (310 U.S. 573, 60 S. Ct. 1021, 1024, 84 L. Ed. 1368) is pertinent: 'Certainly in a domain of knowledge still shifting and growing, and in a field where judgment is therefore necessarily beset by the necessity of inferences bordering on conjecture even for those learned in the art, it would be presumptuous for courts, on the basis of conflicting expert testimony, to deem the view of the administrative tribunal, acting under legislative authority, offensive to the 14th Amendment. *** Plainly these are not issues for our arbitrament. *** It is not for the Federal courts to supplant the Commission's judgment even in the face of convincing proof that a different result would have been better.' See also 310 U.S. 576, 61 S. Ct. 346, where the same case was under consideration: 'When we consider the limiting conditions of litigation-the adaptability of the judicial process only to issues definitely circumscribed and susceptible of being judged by the techniques and criteria within the special competence of lawyers-it is clear that the Due Process Clause does not require the feel of the expert to be supplanted by an independent view of judges on the conflicting testimony and prophecies and impressions of expert witnesses." Bearing in mind that the agency's findings of fact (to the extent that they differed from those of the examiner in that case) were not based upon an actual hearing of the testimony and an observance of the demeanor of the witnesses, and yet were presumed correct by the court, it would not seem to be unreasonable that examiners' findings which are based upon actual hearing of the testimony, observance of the witnesses, and a careful study of the record, should be accorded similar weight on review by the agency. Thank you again for the opportunity to be of service. ROBERT W. LISHMAN, PAUL N. PFEIFFER, CIVIL AERONAUTICS BOARD, Chief Counsel, House Legislative Oversight Subcommittee, DEAR MR. LISHMAN: I am enclosing a recent opinion of the Civil Aeronautics Board in a safety enforcement case, Pyle v. Welling, decided June 2, 1959. Of special interest is the concurring opinion of Member Hector in which he stated that since there is substantial, adequate, and reliable evidence to support the examiner's decision, it should be affirmed. The following quotation at page 3, in my opinion, reflects the relationship between the examiner and the Board: "To my mind, it is clear that there was substantial, reliable, and probative evidence for either version of the accident. In a situation such as this where the decision turns so largely on the comparative weight to be given to conflicting testimony, the demeanor of the witnesses, and the careful point-by-point consideration and analysis of lengthy testimony which can be given only in a hearing of first impression, I think the Board has no alternative but to affirm the examiner. We must not attempt to retry these cases on appeal." In my judgment, the same rationale applies to the factual findings made by an examiner in rulemaking and initial licensing proceedings. Certainly the Board can reverse on policy and legal grounds, but the findings made by the examiner who has lived with the case are entitled to substantial weight and should not be remade on appeal as is authorized in section 8(a) of the Administrative Procedure Act, unless clearly erroneous upon the basis of the entire record. Incidentally, for your information, Member Hector is also in favor of opinion writing by agency members and their personal staffs directly under their supervision. I understand that an article written by him, to that effect, will shortly be published in the American Bar Association Journal. Thank you for your courtesy and consideration. Sincerely, PAUL N. PFEIFFER, Hearing Examiner. CIVIL AERONAUTICS BOARD, Hon. ROBERT W. LISHMAN, Chief Counsel, House Legislative Oversight Subcommittee, DEAR MR. LISHMAN: This is intended to supplement the first paragraph on page 8 of my prepared statement before the House Legislative Oversight Committee roundup panel discussion relating to the role of the hearing examiner in which I pointed out that although no hearing examiner had been allocated a supergrade position, such allocations have been made to a host of other agency officials who formerly were rated at or below the level of the chief examiner. I have been informed that an additional allocation has recently been made by the Civil Service Commission to the Civil Aeronautics Board bringing up to 23 the number of supergrade positions at this agency, in addition to the special compensation at similar levels presently authorized Board members' assistants and the Executive Director. Allocations of grade GS-16 have been made to all Assistant General Counsels and all Division Chiefs; Associate Bureau Chiefs and the Associate General Counsel have been awarded GS-17; and the General Counsel and two Bureau Chiefs have been awarded GS-18. The Chief Hearing Examiner was not granted a supergrade position despite a favorable recommendation by the Board. I am also informed that this, as a practical matter, exhausts the number of supergrade positions established for the Board by Congress in the 1959 and 1960 budgets. In my opinion, the inequity thus established calls for congressional action fixing the compensation for hearing examiners at a dollar level ($17,500 per annum was suggested in view of the $19,000 level accorded Commissioners of the Court of Claims) irrespective of intra-agency and interagency supergrade position allocations by the Civil Service Commission. The testimony before your committee has clearly underlined the importance of the role of the hearing examiner in shortening the record and eliminating delay and expense to the parties and in the preparation of an intelligent initial decision. If the position is to attract attorneys of sufficient competence to perform the function in the manner in which both the Government witnesses and the industry representatives indicated should be carried out, then compensation should be fixed by Congress at a level to bring into and retain in the public service the men of the desired caliber. It is apparent that the Civil Service Commission has not recognized the importance of the hearing examiner role through its repeated denial of additional compensation, even to the chief examiner. Since supergrade positions have been exhausted in the current budgets, the only remedy lies in legislation which will fix the salaries of the hearing examiners in the agencies subject to the jurisdiction of your committee at the necessary level. Thank you for your consideration. Sincerely, PAUL N. PFEIFFER, SUPPLEMENTAL STATEMENT OF J. D. BOND, HEARING EXAMINER, FEDERAL COMMUNICATIONS COMMISSION FEDERAL COMMUNICATIONS COMMISSION Much has been said by many persons in this subcommittee's studies of Federal regulatory agencies. With reluctance to add to the compendium of statements before you, I respectfully offer these brief supplemental comments with the hope that they will be found germane to the problems at hand. Constructive legislation is needed. The present challenge to the Congress is to enact laws which will proclaim to the people of this Nation that the regulatory agencies in the Federal Government can, will, and indeed must, accord fully just and fair and expeditious treatment to the citizens and problems before them. Lest this sound like an idle declamation of patriotism, I wish to state some underlying reasons why legislative reforms are called for. Defenders of the status quo urge that little or no change should be made because there really isn't much wrong in and with the agencies. Moreover, they say, whatever deficiencies may exist can very effectively be remedied by administrative actions by and within the agencies without legislation. It is argued also that the discretion of the agencies to make changes ought not to be disturbed by mandates from Congress that changes must be made. The claim is made that whatever laws might be enacted would shackle and burden the processes of the agencies for doing the work assigned by their basic statutes. Experience shows that these contentions lack merit, and that legislative action should be taken. Is everything quite right in and with the agencies? Although some have answered in the affirmative, and notwithstanding that the required annual reports to Congress from the agencies do not assert that there are shortcomings in their performance, yet the investigations made by this subcommittee have revealed, sometimes dramatically, that not all is well with the conduct of some agency proceedings. Can existing deficiencies be cured by administrative action without legislation? Most of them could; but would the curative steps be lastingly taken? Agencies can adopt codes of ethics and procedural systems for adjudication on the record, for example, they can as well modify or repeal such regulations. Strong evidence favoring legislation is found in the showing that needed procedural reforms are most actively considered by the agencies when the stimulus of threatened legislative action is applied. If changes for improvement are good and uesful, then legislation to insure their enduring accomplishment in needed. The agencies' discretion to act in these directions will remain also a discretion not to act unless the Congress requires action. Would the regulatory agencies be hampered in their operations if legislative changes such as are proposed in pending bills should be enacted? No; on the contrary, fairer and more efficient fulfillment of their statutory obligations would be achieved. To illustrate, the adjudication labors of the agencies members and staffs-would be much diminished by mandatory observance of the judicial traditions in these respects: (1) Hearings and records would be shorter and clearer if the presiding officer, the hearing examiner, were authorized to employ judgelike powers in conducting his prehearing, discovery, hearing, and decisional functions. (2) Review and appeal demands on agency members and officers would be decreased by eliminating virtually all interlocutory appeals and by according to the initial decision the attributes of a trial judge's findings upon appeal. (3) The quality and quantity of decisions-initial and upon agency review-would be improved by rigid on-the-record limitations and by requiring personalized responsibility for the decisional product. (4) Proceedings would be simplified and expedited because a measure of procedural uniformity, even in broad and general areas, would enable litigants and their representatives to prepare and present with clarity the matters essential to decisional action. (5) Existing review staffs could be shrunk and reassigned to decisional officers for productive rather than repetitive work if the agencies' functions are limited to courtlike reviews on exceptions and on policy matters. That the past is prologue is demonstrated by reference to the history of legislative accomplishments in improving administrative procedures. The record of hearings that led to passage of the Administrative Procedure Act in 1946 is replete with protests that the functioning of certain agencies would be demoralized and that chaos would follow; the arguments then made are strikingly echoed in some contentions you have recently heard. Nevertheless, Congress had the wisdom to pass that legislation and the public's respect for our administrative processes was augmented. Similarly, in 1952 the Communications Act was amended in important respects despite the strongly urged objections of a majority of the Federal Communica tions Commission that the procedural changes would adversely affect its hearing and decisional work. Again, the Congress exercised its foresight and judgment by enacting that legislation, and the public and the lawyers with business before the FCC continue to believe in the soundness of those amendments. It has been said, and it bears repeating, that the citizens of this Nation loyally support our Government and its processes because they have a proud confidence that among all systems of government ours assures the greatest measure of justice and fairness to a freedom-loving people. When it is made to appear that some weaknesses-even small ones-exist in organizations and procedures within the Federal Establishment, the people rightfully expect their chosen legislators to go forward with constructive improvements to preserve fairness and equal justice under the law. This states the fundamental reason why I believe that prompt and strong legislative action is needed and desired. Without considering specifics of pending bills or the details of areas for improvement, I respectfully submit my opinion that these principles should find expression in the laws to be enacted and amended as a result of the studies made by this subcommittee: (1) The definitions of rulemaking and adjudication in the Administrative Procedure Act are inadequate, and that act's requirements that some agency decisions be based solely on the record are too narrowly applicable. Hence, it should now be declared that all adversary proceedings (properly defined) before the regulatory agencies shall be conducted in compliance with ethical and judicial standards to be specified. (2) The traditions and modern procedures in court cases should characterize adversary proceedings to bolster public confidence in the fairness and integrity of the administrative process. (3) Adversary proceedings should be resolved solely on the basis of the facts and matters of law and policy presented on a publicly made record compiled upon proper notice to, and opportunity for participation by, all interested parties. (4) Hearings should be conducted by the agency en banc or by a hearing examiner with judgelike authority to control the proceeding and shape the record including powers to: (a) limit, enlarge, clarify, and modify issues: (b) conduct prehearing conferences; (c) order and limit discovery; (d) rule, with finality except on appeal from the initial decision, on all evidentiary questions and on all interlocutory motions and pleadings; and (e) issue an initial decision or report that will be final unless appealed or reviewed on the agency's initiative. (5) The hearing record should be strictly limited to matters that relate significantly to the specifically stated and sharply defined issues. (6) The initial decision should be reversed upon agency review only if the fact findings are contrary to the weight of evidence on the whole record, or if prejudicial errors of law are made, or if the decision is against agency policy considerations. (7) The administration of the hearing examiner program for the regulatory agencies should be carried on by an independent office whose responsibilities to the Congress would include reports of studies and recommendations for improving the Federal administrative agencies' organizations and procedures. (8) The tenure and salary of hearing examiners in the six major agencies should be definitely fixed by law commensurately with the independent status and judicial responsibilities of their positions. STATEMENT OF HAROLD P. Boss, MEMBER, FEDERAL TRIAL EXAMINERS My name is Harold P. Boss. I am a hearing examiner at the Interstate Commerce Commission and have been since April 1951. Prior to that time I served as an examiner at the ICC from 1935 to April 1951. I am a member of the Federal Trial Examiners' Conference and served as its president for a term which expired in May 1959. I have read with interest the statements of those taking part in the panel discussions before the House Legislative Oversight Committee, concerning problems of the administrative process, and especially the statements or portions thereof concerning topic II,"The role of hearing examiners. Present strengths and weaknesses. What legislative measures should be taken to increase their stature and effectiveness." A number of the ICC hearing examiners have read the above-mentioned statements and share the views expressed herein. A study of the statements concerning the role of the hearing examiners at the five other agencies participating in the program before the committee is convincing that the role of the hearing examiner at the ICC is different in a number of respects from the role of the hearing examiner at the other agencies, with the exception of the Securities and Exchange Commission. The differences and other matters hereinafter discussed, if considered separately, may appear on the surface to be small and perhaps petty in some respects. If considered in their entirety, however, they lead to but one conclusion-namely, that they constitute the weakness in the hearing examiner system in effect at the ICC. It is believed that if such matters were corrected, the role of the hearing examiners at the ICC would be greatly strengthened, and ultimately the efficiency of the ICC itself increased. Several of those appearing before the committee have stressed the fact that hearing examiners at the ICC are free to reach any conclusion they think is correct in deciding or recommending decisions in cases assigned to them for hearing. There is no question that this is the fact. What has not been brought out, however, is that hearing examiners at the ICC are far from free in other respects pertaining to the role Congress intended, as set forth in the Administrative Procedure Act, hereafter called APA. The importance of the role of the hearing examiner at the ICC is indicated in that agency's 1958 annual report to Congress, which reveals that for the fiscal year ending June 30, 1958, more than 3,300 hearings were held, and that 1,404 initial decisions became effective. The overwhelming majority of the hearings were conducted before hearing examiners who issued a major portion of the effective initial decisions. As hereinafter stated, initial decisions are not issued in all types of cases. It is reasonable to assume that if initial decisions were issued by hearing examiners in all types of cases, the number of initial decisions which become effective would increase, with a consequent decrease in the work of the ICC Commissioners. At the ICC, unlike most of the other agencies, the hearing examiners are not in a Bureau of Hearings or other organizational unit under a chief hearing examiner for administrative purposes. The ICC hearing examiners, numbering some 98, are assigned among three Bureaus-Finance, Operating Rights, and Rates and Practices. Each Bureau is headed by a director. None of the Directors or Assistant Directors is a hearing examiner. At present each of the three Bureaus is virtually a separate agency. Each Bureau is staffed both with hearing examiners and attorney-advisers, as well as clerks. Each Bureau handles not only matters pertaining to the assignment of cases for hearing coming within its specialized jurisdiction, but also all matters relating to the preparation of drafts of final reports for the ICC or a division thereof, initial review of such drafts, and all petitions requesting further action, in the type of cases over which its hearing examiners preside. The procedure is not even uniform in each Bureau with respect to the type of report issued by its hearing examiners following the hearing. For example, in the Section of Motor Carrier Finance of the Bureau of Finance, hearing examiners issue what are designated as "Recommended Reports and Orders" which are the initial decisions referred to in the APA-which may become effective as orders of the ICC in the absence of exceptions. In the same Bureau, however, hearing examiners in the Section of Convenience and Necessity issue proposed reports, referred to as recommended decisions in the APA. Hearing examiners in the Bureau of Operating Rights generally issue reports and recommended orders (initial decisions) in all proceedings involving applications of motor carriers, brokers, water carriers, or freight forwarders, for operating authorities. With respect to motor carriers and brokers, the procedure is specifically provided for under section 17 (10) of the Interstate Commerce Act, but that act contains no provision for similar procedure in cases involving water carriers and freight forwarders." In the Bureau of Rates and Practices, hearing exam 1 Civil Aeronautics Board, Federal Communications Commission, Federal Power Commission, Federal Trade Commission, and Securities and Exchange Commission. a Under pt. II of the Interstate Commerce Act, certain proceedings involving operations by motor carriers in three States or less must be referred to a joint board composed of a member from each State in or through which the operations are or will be conducted. A few years ago-prior to the present organizational setup of the three Bureaus-all application proceedings involving water carriers and freight forwarders were handled by the Bureau of Formal Cases (now the Bureau of Rates and Practices) and its hearing examiners did not issue initial decisions in such application proceedings. |