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it to continue to utilize its specialized experience in informal cases and in formal cases in an effective manner. By taking from the Commission its quasijudicial powers, H. R. 3871 nullifies the authority of the Commission to formulate and execute an administrative policy designed to achieve a uniform and consistent program of enforcement such as Congress intended under the present act.

It should be apparent from what has been said that H. R. 3871 is not adapted to elimination of delays and expensive proceedings about which Congressman O'Hara complains in his statement. It cannot be denied that there have been many complaints about delays in handling Federal Trade Commission cases and that the administrative process has sometimes failed to achieve expedition in the disposition of cases as was contemplated in the creation of administrative agencies. Without attempting to resolve questions of fact as to the time consumed in Federal Trade Commission cases as compared with cases tried in the courts, this much may be fairly said : Many court cases in the field of unfair trade practices and restraints of trade require considerable lapse of time before they are completely adjudicated. The same may be said concerning Federal Trade Commission proceedings before they reach the appellate courts. However, it is not fair to select the relatively few instances in which the Commission was guilty of undue delay in deciding cases as a basis for generalizing that there is undue delay in most Federal Trade Commission proceedings. A comparative survey of Federal Trade Commission proceedings and traditional court proceedings would probably reveal that very often neither judicial justice nor administrative justice can be achieved without paying the worth-while price of delay. Indeed, in order to conform to the procedural requirements of the Administrative Procedure Act of 1946, it must be recognized htat in certain procedures delay is inherent in the vrey safeguards which are created to protect adequately the rights of citizens. It also seems reasonable to suppose that by transferring to the district courts the trial of issues of fact as well as of law, there will inevitably be delays resulting from the technical requirements of judicial proceedings. It has already been pointed out that the informal stipulation procedures of the Federal Trade Commission under its present act often expedite the settlement of cases. It is hardly likely that any similar procedures in courts of law will produce better results than have been produced within the Federal Trade Commission's internal procedures.

No useful purpose would be served by a detailed refutation of the theory underlying H. R. 3871, insofar as it is designed to cure the comingling of prosecuting and adjudicatory functions. The House Committee on Interstate and Foreign Commerce will find that there is readily accessible to it an analysis of the pros and cons of this controversial question in the reports of the American Bar Association committees, in the report of the Attorney General's Committee on Administrative Procedure, and in the hearings before the Senate and House Committees on the Judiciary.

In fairness to the proponents of H. R. 3871, it should be said that as a matter of principle, the argument that there should be a complete separation of prosecuting and judicial functions is an appealing one. In attempting to translate that principle into practice, however, it has found that with respect to administrative agencies which possess such a combination of functions it is often difficult to separate sharply the quasi-judicial functions from other functions. Be that as it may, the vital point to bear in mind is that under the Administrative Procedure Act of 1946 the approach, so far as an agency like the Federal Trade Commission is concerned, is to make a more effective internal separation of the investigatory, prosecuting, and quasi-judicial functions. Even if it were assumed that there are valid reasons for complete separation of functions, there is no justification for depriving the Federal Trade Commission of its quasi-judicial functions in the face of its efforts both before and subsequent to the Administrative Procedure Act of 1946 to achieve an internal separation of its various functions. H. R. 3871 goes even further than the idea of creating an administrative court in order to achieve the separation of functions. It attempts to reopen an issue decided by the Administrative Procedure Act when Congress rejected the idea of substituting judicial fact finding for administrative fact finding.

Congress has decided that the better way is to improve and strengthen the procedural safeguards. The Federal Trade Commission has done that very thing by its revised rules of practice and policy statement. It has also taken affirmative steps to assume greater independence of its trial examiners in order that they may approximate the status of a trial judge.

With respect to judicial review, H. R. 3871 cannot justify the singling out of the Federal Trade Commission for attack on the grounds, as stated by Congressman O'Hara, that the Commission's orders are “immune to effective review by

the courts." Judicial review of the Commission's orders is based upon longestablished principles deemed to satisfy constitutional requirements and approved by the Supreme Court. It would be idle to expand upon the objections to the present provision for judicial review. Suffice it to say that for more than three decades the orders of the Federal Trade Commission have been subjected to close scrutiny on Judicial review by the courts. In addition to having the final say as to whether, as a matter of law, there is a violation of the act, the courts have reviewed jurisdictional questions, the scope of the order, and the remedy.

So far as the scope of judicial review with respect to findings of fact is concerned, it is true that the courts are bound by the mandate that findings of fact of the Commission shall be conclusive, if supported by testimony.

In his statement in support of the bill, Mr. O'Hara complains about this narrow basis of judicial review and prefers the judicial standard in civil cases of preponderance of the evidence as a basis for sustaining findings of fact. That controversy has been aired in 1946 in hearings before the House Committee on Interstate and Foreign Commerce on H. R. 2390.

It is not necessary to eliminate the Commission's quasi-judicial powers in order to achieve a broader scope of judicial review of findings of fact. That question is a debatable one, and opinions may well differ concerning the correctness of the present narrow scope of judicial review of the Commission's findings of fact. The proponents of H. R. 3871 can continue to petition Congress for an amendment of the present act to confer upon the courts broader powers of review without substituting the courts for the Commission.

As matters now stand, section 10 (c) of the Administrative Procedure Act of 1946 and the judicial-review provisions of the Federal Trade Commission Act provide safeguards to private parties. If improvements in that regard are desired, they should be sought within the present framework of quasi-judicial agencies rather than by a futile effort to overturn the entire theory of the proper role of an administrative tribunal in the contemporary Federal regulatory field. Every objection against the narrow scope of judicial review of the Federal Trade Commissions orders applies with equal force to other Federal regulatory agencies.

The trend is toward improving the administrative process by procedural reform. H. R. 3871 is out of step with that trend and comes at a time when the Administrative Procedure Act of 1946 is still largely untried by actual experience under its provisions and under the amendments of the procedures of specific Federal administrative agencies made to conform to that recent act.

In this part of the statement, I desire to emphasize the point that the Federal Trade Commission is no exception to the rule that there is no counsel of perfection with respect to any administrative agency or, for that matter the administrative process. The same may be said regarding the judicial process.

As editor of the silver anniversary issue of the George Washington Law Review (1940), 8 George Washington Law Review, pages 249–748, I wrote a foreword which summarizes the review and appraisal of the first 25 years of the Commission's work as reflected in the articles of the various contributors to the issue. At that time I said :

“The year 1940 finds the Commission securely established in the structure of public administrative tribunals. Today its critics do not challenge its existence or the necessity for such an agency of inquiry and regulation, with some qualifications pertaining to economic investigations. And a more favorable public opinion exists."

This conclusion bears directly on the major point that H. R. 3871 runs counter to the general acceptance of the Federal Trade Commission as an indispensable arm of the Congress and an aid to the courts in performing quasi-judicial functions. Without such functions, the Commissions regulatory work would be rendered sterile. Its special expert experience would be a mere shadow of its present status if the Commission were demoted to a mere investigatory and prosecutory agency.

In my foreword to the Federal Trade Commission silver anniversary issue, I also pointed out the respects in which the Commission's work manifested certain deficiencies as discussed by authors of articles in the symposium. These shortcomings are matters on which similar criticisms may be made with respect to other Federal regulatory agencies, with inevitable differences in degree. There are rarely all blacks and all whites in the deficiencies of a human institution. Intermediate shades of the good and the bad generally exist. It is a matter of more or less, rather than all or nothing. So it is with the Federal Trade Commission.

In two decades of teaching law in the city of Washington, I have had numerous opportunities to observe at first hand the work of the Federal Trade Commission. I am as convinced today as I was in 1940, when I wrote the foreword mentioned above, that over the entire period of its existence there is a black-ink balance in the record of the Commission's activities.

To be sure, there are minus items as well as plus items in that record. As recently as January 1948, I participated in a symposium on the RobinsonPatman Act. In an article entitled “Should the Robinson-Patman Act Be Amended?” published in the Commerce Clearing House, Robinson-Patman Act Symposium (1948 edition), I pointed out certain defects in the standards of the present Robinson-Patman Act and in the Commission's administration of that act. No doubt similar shortcomings may be found in the Commission's administration of section 5 of the Federal Trade Commission Act which H. R. 3871 seeks to amend.

Despite such criticisms there is no tenable basis, on a balancing of all factors, for the drastic provisions in H. R. 3871 which would withdraw the quasi-judicial functions from the Commission's authority. The right road in keeping with the sheer functional necessity for conserving the administrative process is to make constructive suggestions for the improvement of that process and for adequate safeguards of the rights of respondents. In that task the legislative and judicial branches of the Federal Government share responsibility with the Federal administrative tribunals.

One more observation needs emphasis. The O'Hara bill reflects distrust of the impartiality of the Federal Trade Commission. Such distrust is sometimes more the product of emotion rather than calm reflection.

There is no basis in the record of the Federal Trade Commission's activities to justify general assertions that the Commission or its legal staff are so subject to "human frailty” that they are, as Mr. O'Hara alleged, “precluded by their act from attaining the measure of impartiality associated with judicial procedure.” My observations persuade me to the conclusion that the Commission and its staff have rendered faithful public service free from personal bias or prejudice. Of course, no person can claim to be free from beliefs. This applies to all branches of government.

In the Cement Institute opinion, referred to earlier in this statement, the Supreme Court pointed out that judges in court cases form views arising out of their adjudication of issues of fact and law. Administrative officials likewise develop beliefs arising out of their specialized expert experience.

In Humphrey's Executor v. United States, supra, Mr. Justice Sutherland stressed the point that Congress took pains to create a Federal Trade Commission as an independent, nonpartisan tribunal, saying that "it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law.”

Congress, as the creator of the Commission, has expressed its faith in the ability of the Commission to function impartially. The Commission is responsive to the will of the Congress and under its scrutiny. The Senate has the authority to confirm appointments to the Commission. The same considerations that apply to the appointment of judges can be applied to the Commissioners who, after all, are appointed only for short terms. The O'Hara bill overlooks the fact that Commissioners are thus more directly accountable to the will of the people than lifetime tenure judges.

In my foreword in 8 George Washington Law Review, at pages 254–256, mentioned above, I ventured conclusions with respect to the Commission's 25 years of work which are repeated here as having equal applicability in 1948 as in 1940 when the statement was made:

in the main the contributors to this issue have drawn a composite picture of a black-ink balance of the Commission's activities. It is generally conceded that the Commission has made a creditable record in the correction of false and misleading advertising and of misrepresentation practices generally. There is less uncertainty regarding the extent of the Commission's powers under section 5 of its act and a more responsive legislative and judicial attitude. The achievements of its economic division in industrial research are considerable and the legislation attributable to the investigations of that division as well as legislative recommendations is more extensive than some commentators have supposed.

“The background is one of an agency that survived the faltering steps of infancy, emerged from the inevitable conflicts of adolescence, and is now at the stage of a maturing policy and increasing expertness in administration.

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It may thus be said that the fuller life of this administrative agency has begun well before the proverbial 40. Without overlooking differences in subject matter, legislative policies, procedure, and judicial attitudes, it is noteworthy that the sister Interstate Commerce Commission also passed through a period of trials and tribulations before it was awarded a doctor of philosophy degree in administrative efficiency. The more than 50 years of the Interstate Commerce Commission teaches the lesson that the element of time cannot be circumvented in the accumulation of administrative wisdom and experience. It is a continuous process of trial and error.

“Vitalized as it is at 25, the Federal Trade Commission, like the Interstate Commerce Commission when it was the same age, has credit items and potentialities which betoken further progress toward a fuller attainment of the objectives contemplated by its sponsors. If the Commission continues to command the cooperation recently shown by Congress and the confidence of the courts and the public, such as it now has, there is every reason to believe that it will constantly reappraise its own policies, refurbish its work tools, and correct errors as they are discovered. Already woven into the fabric of our system of public regulation of trade and monopolistic practices, the Commission has demonstrated the importance of safeguarding our business order from the forces which would impair the functioning of our competitive system and drag down the level of business conduct."

I respectfully urge the Committee on Interstate and Foreign Commerce to reject H. R. 3871. As stated at the outset of this statement, it represents an attitude that the quasi-judicial administrative tribunal is alien to the AngloAmerican legal system and that only a traditional court of law can accord a citizen a fair and impartial trial of issues of fact. That attitude is a throw-back to the days when courts of equity were regarded with a jaundiced eye by those who espoused common-law courts as the sole legitimate tribunals.

There is no irreconcilable conflict between administrative justice and judicial justice. Both types of adjudication can exist in harmony with the fundamental concept of judicial supremacy of the courts of law.

H. R. 3871 is an ill-considered proposal to revive the outmoded concept of a legal system in which only traditional courts of law exist.

If the entering wedge of H. R. 3871 in taking from the Federal Trade Commission its quasi-judicial powers is once made, then an erosive process will have been begun to deprive other similar Federal regulatory agencies of their lifeblood powers. For it should be remembered that the various other Federal regulatory acts are patterned on the Federal Trade Commission Act.

There is no need for burning a house in order to roast prime ribs of beef. We can have the Federal Trade Commission with improvements and judicial supremacy as well. “The baby should not be thrown out with the bath.”

H. R. 3871 should be understood for what it is—an effort to bring about the demise of the Federal Trade Commission as a regulatory agency. It does not even purport to give the Commission a decent burial. I have every confidence that Congress will not give any encouragement to such a proposal.

The CHAIRMAN. Are there any questions?
Mr. DOLLIVER. Mr. Chairman.
The CHAIRMAN. Mr. Dolliver.

Mr. DOLLIVER. I first want to disabuse your mind of any notion that this bill is in any sense an attack upon the Federal Trade Commission or, indeed, upon any commission or individual or group of individuals.

I hope that you understand, and I am sure that you do, that the purpose of this committee is to find a solution to a dilemma with which we are constantly confronted in dealing with specialized subjects such as come under the purview of the Federal Trade Commission.

Now, I am interested in one aspect of your testimony which I would like for you to develop, if you will.

You speak of the inevitability of the development of administrative processes. What do you mean by that?

Mr. OPPENHEIM. Well, sir, before I answer your question, I may say that I was not under the impression that this bill was an attack upon the Commission in the shape of an attack upon any Commis

In two decades of teaching law in the city of Washington, I have had numerous opportunities to observe at first hand the work of the Federal Trade Commission. I am as convinced today as I was in 1940, when I wrote the foreword mentioned above, that over the entire period of its existence there is a black-ink balance in the record of the Commission's activities.

To be sure, there are minus items as well as plus items in that record. As recently as January 1948, I participated in a symposium on the RobinsonPatman Act. In an article entitled “Should the Robinson-Patman Act Be Amended?”' published in the Commerce Clearing House, Robinson-Patman Act Symposium (1948 edition), I pointed out certain defects in the standards of the present Robinson-Patman Act and in the Commission's administration of that act. No doubt similar shortcomings may be found in the Commission's administration of section 5 of the Federal Trade Commission Act which H. R. 3871 seeks to amend.

Despite such criticisms there is no tenable basis, on a balancing of all factors, for the drastic provisions in H. R. 3871 which would withdraw the quasi-judicial functions from the Commission's authority. The right road in keeping with the sheer functional necessity for conserving the administrative process is to make constructive suggestions for the improvement of that process and for adequate safeguards of the rights of respondents. In that task the legislative and judicial branches of the Federal Gove nment share responsibility with the Federal administrative tribunals.

One more observation needs emphasis. The O'Hara bill reflects distrust of the impartiality of the Federal Trade Commission. Such distrust is sometimes more the product of emotion rather than calm reflection.

There is no basis in the record of the Federal Trade Commission's activities to justify general assertions that the Commission or its legal staff are so subject to "human frailty" that they are, as Mr. O'Hara alleged, “precluded by their act from attaining the measure of impartiality associated with judicial procedure.” My observations persuade me to the conclusion that the Commission and its staff have rendered faithful public service free from personal bias or prejudice. Of course, no person can claim to be free from beliefs. This applies to all branches of government.

In the Cement Institute opinion, referred to earlier in this statement, the Supreme Court pointed out that judges in court cases form views arising out of their adjudication of issues of fact and law. Administrative officials likewise develop beliefs arising out of their specialized expert experience.

In Humphrey's Executor V. United States, supra, Mr. Justice Sutherland stressed the point that Congress took pains to create a Federal Trade Commission as an independent, nonpartisan tribunal, saying that “it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law."

Congress, as the creator of the Commission, has expressed its faith in the ability of the Commission to function impartially. The Commission is responsive to the will of the Congress and under its scrutiny. The Senate has the authority to confirm appointments to the Commission. The same considerations that apply to the appointment of judges can be applied to the Commissioners who, after all, are appointed only for short terms. The O'Hara bill overlooks the fact that Commissioners are thus more directly accountable to the will of the people than lifetime tenure judges.

In my foreword in 8 George Washington Law Review, at pages 254–256, mentioned above, I ventured conclusions with respect to the Commission's 25 years of work which are repeated here as having equal applicability in 1948 as in 1940 when the statement was made:

in the main the contributors to this issue have drawn a composite picture of a black-ink balance of the Commission's activities. It is generally conceded that the Commission has made a creditable record in the correction of false and misleading advertising and of misrepresentation practices generally. There is less uncertainty regarding the extent of the Commission's powers under section 5 of its act and a more responsive legislative and judicial attitude. The achievements of its economic division in industrial research are considerable and the legislation attributable to the investigations of that division as well as legislative recommendations is more extensive than some commentators have supposed.

"The background is one of an agency that survived the faltering steps of infancy, emerged from the inevitable conflicts of adolescence, and is now at the stage of a maturing policy and increasing expertness in administration.

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