iners issue reports and recommended orders-initial decisions-only in certain motor rate cases arising under part II of the Interstate Commerce Act. In all other cases, the hearing examiners in that Bureau issue proposed reports. In order better to understand the reasons believed to account for the variation in the types of reports issued by hearing examiners at the ICC, it is deemed pertinent to review briefly at this point the events which brought about the present system. The whole matter is discussed at some length in an article entitled "A Chinaman's Chance-The Riss Decision" by John R. Turney and published in the June 1951 issue of the ICC Practitioners' Journal (see vol. XVIII, No. 9). The following are excerpts-the emphasis is supplied-from that article:

4

*** * it was felt by the Commission [ICC] and many practitioners that it should be exempted from the act [Administrative Procedure Act], and vigorous but futile efforts were made toward that end. Hence, as was to be expected, the passage of the act was received in dignified acquiesence rather than with enthusiastic cooperation" (p. 740).

"At about the same time, the Commission entered a general minute, which it was given the power to do, reserving to itself the initial decision in all cases heard by hearing examiners. Thus, although most of the proceedings under part I have been heard by examiners qualified under the Administrative Procedure Act, the purpose of that act to add responsibility to the position has not been achieved" (p. 741).

*** Under a minute entered by the Commission over 30 years ago, the complete independence of an examiner as to findings and conclusions expressed in a proposed or recommended report is preserved. To that extent, the Commission anticipated the Administrative Procedure Act. However, in other respects the examiner occupies a subordinate clerical position. *** They are subject to the discipline of clerical employees and with the exception noted are quite circumscribed in their activities. They obtain rank and importance only by long service with the Commission. Their quality is attested by the fact that many have left the ranks of examiner to become outstanding leaders of the Commission's bar. Others who have elected to make a career of Government service have attained a stature comparable in every way with that of a commissioner. Some are not quite so good; but by and large they form a highly intelligent, capable and honest staff of trained triers whose professional development has been handicapped somewhat by their status and whose compensation generally is far below their merit" (pp. 743-4).

“* * * I respectfully suggest that consideration be given to the rescission of the minute which had the effect of removing the initial decision from the hearing examiner, as contrary to the spirit and purpose of the statute. This will mean that the hearing examiner's report and order will become the report and order of the Commission unless exceptions are timely filed or it is stayed by the Commission's own action" (p. 744).

"The Administrative Procedure Act has for its purpose the creation of a body of men who in fact are and should be recognized as assistant commissioners in everything except title. Giving full sweep to the spirit as well as its letter, it contemplates that they will be men who have 'had a progressively responsible experience and demonstrated conclusively their ability to conduct hearings in a dignified, orderly and impartial manner, determine credibility of witnesses, sift and analyze evidence, apply agency and court decisions, prepare clear and concise statements of fact and law, and on the whole, exercise sound judicial judgment.'"

The ICO has not rescinded the above-discussed minute, which was adopted in December 1946, and so far as the record shows there is no indication that any action was ever taken by the ICC concerning the suggestions made by Mr. Turney. At the time of its adoption, the practical effect of the minute was to prohibit initial decisions in any type of ICC proceeding, because shortly after the APA became effective, the ICC concluded that it applied only to those proceedings in which a hearing was mandatory, and did not apply to proceedings where the hearing rested in the discretion of the agency. In other words, the ICC in effect concluded that by far the majority of its work did not come within the provisions of the APA. It was not until after the decision of the Supreme

4 John R. Turney, a practicing attorney, participated as a panel member at the discussion before the subcommittee on Friday, June 19, 1959.

For a partial digest of decisions involving application of the Administrative Procedure Act in proceedings before the ICC, see the appendix to an article by John J. Burchell, printed in the February 1955 issue of the ICC Practitioners Journal, beginning at p. 375 (vol. XXII, No. 5).

Court in the Riss case, 341 U.S. 907, in April 1951, that the ICC began assigning the majority of its cases to hearing examiners. Even after that decision the ICC concluded that the APA did not apply to proceedings handled under modified procedure, where no oral hearing was held, and it was not until after the decision of the court in the Reliance Steel case, 150 F. Supp. 118, holding that such proceedings were subject to the APA, that the ICC changed its method of handling this type of case.

It should be noted that the above-described minute contains an exception which includes cases required to be submitted to joint boards under section 205 of the Interstate Commerce Act, and specific cases or classes of cases as to which the ICC may order exemption from the general rule promulgated by the minute. It is not believed that there has been any change in the wording of the minute since its adoption. In any event, application proceedings under part II of the act are assigned to hearing examiners for initial decisions and since operating authority cases filed under parts III and IV of the act were transferred to the Bureau of Operating Rights about 2 years ago, the latter proceedings also have been assigned to hearing examiners for preparation of initial decisions. As previously stated, hearing examiners handling such proceedings in the Bureau which formerly had jurisdiction thereof were allowed to issue only recommended decisions therein.

Perhaps the next major difference between the role of the hearing examiners at the ICC and that of the other agencies pertains to the work assigned to ICC hearing examiners. Until recently hearing examiners often were, and in some instances now are, required to make recommendations to the ICC respecting petitions for instituting investigations, and petitions for reopening, futher hearing, or reconsideration in decided cases, including those heard by the hearing examiner to whom the petition has been referred. In the Bureau of Operating Rights, such matters now are generally handled in the Section of Appeals. That Section, however, is headed by a hearing examiner.

Hearing examiners at the ICC also have, in the past, been requested to prepare final reports, including those in cases they have heard. This practice has now largely been discontinued except in unusual cases, or in instances where a recommended or initial decision has been waived by the parties at the hearing, and in heard cases involving suspended rates or practices under sections 15 (7), 216(g), 307(g), and 406(a) of the Interstate Commerce Act. Following the hearing in proceedings involving suspended rates or practices, and also when a recommended or initial decision has been waived, the hearing examiner who conducted the hearing is expected to prepare a draft of report for the ICC or a division thereof. In such instances, the ICC purports to make the finding specfied in the last sentence of paragraph (a) of section 8 of the APA, that omission of a tentative or recommended decision is necessary.

In addition to the foregoing, ICC hearing examiners also serve on the staffs of certain Commissioners and devote little, if any, of their time to the primary duties of a hearing examiner, that is, the actual hearing of cases and the writing of reports based upon the record made therein. As hereinafter stated, the assignment of hearing examiners to such duties for any length of time certainly is violative of the provisions of the APA relative to rotation of cases. Nine hearing examiners are serving on the staffs of certain Commissioners. By letter dated April 7, 1959, the Chairman of the Civil Service Commission directed the Chairman of the ICC to furnish information relative to the duties performed by such hearing examiners and especially those pertaining to the hearing of cases and writing of reports. The ICC furnished the information in June 1959. ICC hearing examiners are not assigned to cases "in rotation so far as practicable", as required by section 11 of the APA. Theoretically, there is a division warranting the assignment of the more difficult and complex cases to the grade GS-15 hearing examiners, but the line of demarcation is rather nebulous. And, within each grade, there is a certain selectivity in assignment, according to the idea of the Director or Assistant Director as to the capability or aptitude of a hearing examiner for a particular type of case. With respect to the hearing examiner assigned to Commissioners' offices, there is of course no rotation.

One of the hearing examiners assigned to a Commissioner's office does hear and prepare reports in numerous cases involving certain matters pertaining to safety of operations. The ICC hearing examiners are in grades GS-14 and 15 and this is true of each of the three bureaus. It also is true of those hearing examiners assigned to Commissioners' offices. Admittedly, the grade structure is an improvement over that prevailing prior to 1954, when the ICC hearing examiners were compensated in five pay grades.

Other responsibilities of the hearing examiners as set forth in section 7(b) of the APA are in effect nullified by the ICC through its general rules of practice, as is evident from the following.

ICC Rules of Practice provide:

1. Examiner may issue but subpena must be signed by ICC secretary or Commissioner (rule 1.56(b)).

2. ICC order necessary to obtain deposition (rule 1.57).

3. ICC assigns the time and place of hearing (rule 1.55a). ICC may change brief dates, etc., fixed by examiner without approval or consultation with examiner (rule 1.21b).

4 Under rule 1.68a the effect is that only the ICC may determine before hearing if prehearing conference is to be held. Rule 1.68 (c) provides that the action taken at prehearing conference be recorded by an order; ICC withholds authority from examiner to enter such an order.

5. All procedural requests for postponements of hearings, extensions of time for filing pleadings, late-filed exhibits, etc., are reserved unto the ICC and its administrative staff.

It is believed that the foregoing amply show that the various points raised by Mr. Turney in his article heretofore discussed are still true and correct. To paraphrase some of Mr. Turney's conclusions therein, as of this date (1) the ICC does not cooperate, enthusiastically or otherwise, with the spirit and purpose of the APA; (2) the ICC has in more ways than one evaded the "purpose of that act to add responsibility to the position" of hearing examiners; and (3) except with respect to complete independence as to his findings and conclusions in a report, the hearing examiner still "occupies a subordinate clerical position" and they are "quite circumscribed in their activities." As was stated by Hon. Irving R. Kauffman, judge, U.S. District Court for the Southern District of New York, in a recent speech:

“* * * every effort of the members of the bar, the reviewing courts, and particularly the agencies themselves must be expended to increase the prestige of hearing examiners. They are conscientious men of high integrity, performing an extremely important function. Those who practice before them must never be permitted to lose sight of that fact." [Emphasis supplied.]

The role of hearing examiner at the ICC is set forth above, as well as pertinent facts concerning the present strengths and weaknesses of the position of hearing examiner at that agency. The question of what legislative measures should be taken to increase the stature and effectiveness of the hearing examiner has been discussed at some length by several persons participating in the panel discussions. It is not deemed necessary to add to that discussion except to say that the proposals advanced by Mr. Joseph Zwerdling are endorsed. As we view it, legislative measures fall somewhat in the category of long-range planning. It is believed that the ICC itself can now, and should take, prompt action to increase the stature and effectiveness of its hearing examiners. Undoubtedly, suggestions to that effect by the special subcommittee would be of major importance. Following are some suggested actions which it is believed that the ICC should take promptly in order to increase the stature and effectiveness of its hearing examiners.

First, the ICC should rescind the minute adopted in December 1946 and direct that henceforth all its hearing examiners should issue initial decisions in all types of cases. Such action would mean that the hearing examiner's report and order would become the order of the ICC, unless exceptions are timely filed or it is stayed by the ICC's own action. Certainly, there have been many cases where no exceptions were filed to the proposed findings of the hearing examiner in proceedings where an initial decision was not issued. In any event, even if there were only a few cases where no exceptions were filed, a good

45253 0-59 -50

measure of time and effort on the part of the agency and its employees, who prepare drafts of final reports, would be saved. The savings should increase as time passes.

Second, the ICC should amend its General Rules of Practice to permit its hearing examiners to perform all the powers set forth in section 7(b) of the APA. This is not to say, however, that the hearing examiner himself should initially assign proceedings for hearings or set his own itinerary. The present volume of work at the ICC is such that hearings probably should continue to be assigned through some central group, or some person or persons directly responsible for this phase of the agency's work. This particular portion of the work is discussed further under suggestions which follow. Other persons who participated in the panel discussion with respect to the ICC made several suggestions concerning its General Rules of Practice. One of these was that the rules should be reviewed periodically by a group composed of various persons employed by, and practicing before, the ICC. It is believed that the time and effort put into such discussion groups would be well spent. In this connection, it is suggested that the ICC amend its present rules to provide specifically for an interlocutory appeal from a ruling of the hearing examiner in those instances where the hearing examiner is convinced that the ruling in question is of the utmost importance to all parties. The rule should provide that the hearing examiner certify the ruling to the agency or a division thereof for prompt action. Such a rule is now in effect at the Civil Aeronautics Board and there is good reason to believe that it is both practical and effective.

Third, it is believed that the attention of the ICC should be directed to the fact that the primary duty of each and every one of its hearing examiners is to conduct hearings and prepare reports and orders based on the records made at such hearings. Although section 11 of the APA provides that a hearing examiner may be assigned such other duties as are not inconsistent with his duties and responsibilities as a hearing examiner, it is believed that this permits a hearing examiner to be used for other duties following, and only following, the completion of initial decisions in all cases he has heard on an itinerary and when he is awaiting the assignment of another itinerary,

As heretofore stated, hearing examiners at the ICC are used for numerous duties other than the hearing of cases and writing reports on the record thus made. Some ICC hearing examiners have heard few cases, notwithstanding the fact that the number of cases requiring hearing has increased substantially during the past year. Some ICC hearing examiners are not given time to write reports on all cases heard during one itinerary before they are assigned another. The results is that the parties, and especially the applicants in operating authority cases, are denied the benefit of the prompt decision to which they are entitled. Each hearing examiner should have a reasonable time, depending on the difficulty of the cases heard, for the preparation of reports and orders in all cases heard on one itinerary before being given another assignment. Also each and every hearing examiner should be assigned only his fair and equitable share of hearings. The present method of selective assignment evades both the spirit and purpose of the APA. Moreover, it is unfair and inequitable to assign some hearing examiners itinerary after itinerary while others conduct few or no hearings. This certainly is not "rotation so far as practicable." Such inequitable assignments cannot be condoned because the ICC has two grades of hearing examiners.

In my opinion, shared by some other hearing examiners at the ICC, most problems relating to its utilization of hearing examiners would be solved in part if all ICC hearing examiners were in a single bureau and were assigned to cases "in rotation so far as practicable." If this were done, it undoubtedly would mean a considerable savings to the ICC in travel funds and in the manhours required to hear cases. The utilization of all hearing examiners to hear all types of cases would be of benefit not only to the parties but also to the ICC itself. In this connection it is of interest to note that shortly after passage of the Motor Carrier Act of 1935, now part II of the Interstate Commerce Act, all types of proceedings arising under that act except finance cases, were handled by examiners in the Section of Complaints, Bureau of Motor Carriers. These examiners heard and wrote cases involving rates, operating authorities, and related matters, and, so far as the record shows, did excellent work in all types of proceedings. Later the Section of Finance was consolidated with the Section of Complaints and all types of proceedings were thereafter handled by that Section. True, the examiners formerly in the Section of Finance handled by

far the majority of the finance cases, but other examiners were assigned and satisfactorily handled finance cases when such cases were assigned to them. After the passage of the APA and the decision in the Riss case, hearing examiners in the then Bureau of Formal Cases were assigned proceedings involving operating authorities and related matters in all instances where the Bureau of Motor Carriers intervened.

There does not appear any good reason why ICC hearing examiners could not be assigned any type of ICC proceeding. The limitation, "so far as practicable," would permit selective assignment when necessary in the few cases of such highly specialized nature as those involving (1) general increases in rates, (2) certain types of safety cases, (3) nationwide investigations, and similar proceedings. Elimination of the present specialization in hearing assignments would obviate an embarrassing situation, frequent at present, when three ICC hearing examiners, one from each of its Bureaus, are present at the same time, in the same city, competing for the available hearing rooms. The utilization of all hearing examiners to hear all types of cases would make for better administration of all provisions of the Interstate Commerce Act.

Another area, in which there is vast room for improvement in the utilization of hearing examiners at ICC, touched upon briefly at the June 19 session before your committee by Mr. Curry, is in the provision of adequate stenographic, clerical, and messenger service.

In closing, I desire to express my appreciation to the members of the Legislative Oversight Committee for extending me the privilege of expressing the foregoing views on topic II of the panel discussion.

SUPPLEMENTAL STATEMENT OF ROBERT W. LISHMAN, CHIEF COUNSEL, SPECIAL SUBCOMMITTEE ON LEGISLATIVE OVERSIGHT

THE ISSUE OF ADMINISTRATIVE VERSUS JUDICIAL JUSTICE

At the panel hearings on the Administrative process and ethical questions held before the subcommittee on November 18 and 19, 1958, and the series of similar panel hearings held on June 15-26, 1959, the topic most recurringly debated was the question of judicialization of the administrative process.

The pros and cons of this problem and the lack of sufficient up-to-date information as to administrative procedures are discussed by Milton M. Carrow, Esq., in "Administrative Adjudication: Should Its Role Be Changed?" 27 The George Washington Law Review, 279 (1959). For convenient reference purposes the text of the article is included below.

To obtain data concerning current administrative operating procedures, the subcommittee has created an Advisory Council on the Administrative Process. This Council, composed of subcommittee staff members and representatives of each of the six regulatory commissions, will obtain detailed information concerning administrative procedures and report to the subcommittee with recommendations. In the course of its work the Council will communicate with the approximately 100 panelists who participated in the June 1959 administrative process hearings, and seek their comments and suggestions.

(Text of article referred to follows:)