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of law and that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious.' The Federal Trade Commission Act provides that 'the findings of the Commission as to the facts, if supported by evidence, shall be conclusive.' The National Labor Relations Act contains a similar provision. The Securities and Exchange Act provides that conclusiveness shall attach to the findings of the Commission as to the facts if they are ‘supported by substantial evidence.' Similar phraseology is found in the case of the Federal Alcohol Administration Act, the Federal Power Act, the Fair Labor Standards Act, and the Bituminous Coal Act. The Interstate Commerce Act provides as to reparations cases that the findings of the Commission shall be 'prima facie evidence of the matters recited therein. Under the Walsh-Healey Act the findings of the Secretary of Labor are conclusive 'if supported by the preponderance of the evidence.' Under the Commodities Exchange Act, orders of the Commission reviewing or revoking designations of contract markets must be supported by the weight of the evidence.'”

Mr. MONTAGUE. First of all, Dean Stason, with Arthur Vanderbilt, dean of the New York University Law School, for whom Mr. Reece and I have great respect, accepted the substantial-evidence rule and not the preponderance-of-evidence rule in 1941.

Mr. REECE. Mr. Chairman, I appeal to the patience of the Chair for permission to ask you one more question.

Mr. MONTAGUE. It may mean I will have to come back tomorrow, or you will have to sit beyond 12 o'clock.

Mr. Reece. It is on that subject to which you refer.

Has the Commission, in your knowledge, had any findings which have been overruled by the courts, except in those cases where it stated that there was no evidence to support the findings, such as the Carlay case, in which it said there is no evidence in this record to support a finding, and in the Dearborn case, in which it said, admittedly, there is no direct proof in support of this finding.

What I have in mind in asking the question is, do the decisions of the courts in these appeal cases indicate that the Commission had been overruled except in the cases where it was held that there was no evidence to support the finding?

Mr. MONTAGUE. The Commission was overruled many times on questions of law.

Mr. REECE. You can extend your remarks to make reference to that, if you so desire.

Mr. MONTAGUE. It is very frequently overruled on questions of law, but the full effect of the substantial-evidence rule

Mr. REECE. In order to clarify the question, I mean overruled on questions of fact, and I am not referring to overruled on questions of law.

Mr. MONTAGUE. When I say substantial, I mean more than a scintilla. The repeated decisions of the Supreme Court of the United States on that subject are to this effect, it has to be substantial, but if there is substantial evidence supporting a finding, ever since 1791, it cannot be overturned in the case of a civil suit on the Federal side, and the same rule applies in the cases before the Federal Trade Commission. That is absolutely true. No question about that whatsoever.

And I emphasize that the American Bar Association, after studying this question for 10 years, through its administrative law committee, unanimously approved a rule identical with what I am telling you, the substantial-evidence rule. That is all they are asking for. It is all


that is asked for in the McCarran-Sumners bill. It is all that has been asked for by bills which have been supported by Dean Stason.

With reference to Dean Stason, it is a little difficult to harmonize some of the things previously said by him and with your permission, I will put in a bill which he endorsed, in fact, he drafted it, he being chairman of the Committee on Uniform Administrative Procedure for the States, in which he not only endorsed the substantial-evidence rule, and did not have any approval at all for the preponderance of the evidence rule for review, but also stated why, and then another redraft of that bill in which he retained the substantial-evidence rule.

And I have here an analysis of the successive proposals that have come up in the American Bar Association, so that everything which has been suggested by Congressman Reece, everything that you are suggesting, is simply old straw that has been threshed over by a great many people who are just as strongly Republican as you and I are, and do not have any more use for Democrats, the New Deal, or anything else, than you and I do but have all finally come back to the point that this substantial-evidence rule is all right as it stands. And insofar as you are now trying to overturn this, and to put in the preponderance-of-evidence rule, you are putting up something which I tried just as hard as anybody else in the American Bar Association, 10 years ago, to get over, but I became converted, and so have all of the rest of them become converted, and they have approved this substantial-evidence rule, which is against the proposition that you are putting up very manfully and persistently, but which, as I say, is absolutely just as ineffective if you were to go out and argue that the automobile, as you see it in the street, today ought to go back to the electric buggy automobile of the 1900's.

This subject has been discussed by a great many minds by no means in favor of administrative tribunals or agencies or anything else like them, and the final conclusion they have all come down to is that the preponderance-of-evidence rule is not the kind of thing to have, and that the substantial evidence is what they have got to have, and I will put that in.

There is just one more thing, and I will curtail my remarks, and then I will finish.

It occurred to me Saturday just before coming down here that I might be able to find a letter which might be of a little interest to this committee. I have done a great deal of writing on this subject, and curiously enough, a good deal of my writing has been in Dean Stason's own Michigan Law Review, and as I have shown you here, it is pretty difficult to reconcile the kind of bills that Dean Stason has been approving with some of the things he says here.

I do not pretend to know what the answer is, but I will put it in some of his writings, and let you try to decipher it.

He has been advocating this substantial-evidence rule, in spite of the contrary impressions you may have gotten from his testimony here.

I happened to discuss this subject with Chief Justice Stone, whom I knew years before he ever came to Washington, and I sent him an article which I had published in the February, 1942 issue of the Michigan Law Review, Dean Stason's own law school, in which I discussed this Attorney General's Committee's report, showing how Dean Stason there supported the substantial-evidence rule, and then I called Chief Justice Stone's attention to a commissioner who had been appointed by Governor Lehman in New York to look into the whole question of the administrative agencies in the State of New York, and what should be the scope of judicial review.

We had in New York, in 1938, a constitutional convention. Those were the years when I was all for preponderance of evidence, Congressman Reece, just like you, and on the floor of that constitutional. convention, there was a fight to put into the constitution the right of judicial review by a preponderance of the evidence. That fight was carried on by Surrogate James A. Foley, who recently died, and whom we all knew in New York, and greatly respected. While he was in Tammany and I am a Republican, a Union League Club member, I worked all that summer getting material, just as I suppose Jimmie Hoge is giving material to you, Congressman Reece, trying to battle for this preponderance of evidence rule. And what we put in, trying to get that thing over, got this far in the constitutional convention, that Judge Foley got the constitutional convention to agree that the proposal as to whether there should be or should not be that kind of l'eview should be submitted to a popular vote.

Although we have in New York judicial service on the facts of all Supreme Court decisions in the Appellate Division, so that people in New York are far more familiar with the preponderance of evidence rule than are other people of other States, we were overwhelmingly licked in the referendum in the fall of 1938.

The people of the State of New York rejected the suggestion that there should be any review of the administrative decisions by a preponderance of the evidence. Immediately after that, Governor Lehman appointed a Commissioner under what we call the Moreland Act to go into the whole subject of the administrative agencies in New York, and eventually, the Commissioner came through with a report, and I took occasion to write to the Chief Justice and call his attention to it.

The Chief Justice previously had seen the article which I had written in the February 1942 Michigan Law Review, and I got back from him this letter. It belongs in a collection of autograph letters that I have been collecting for a number of years, comprising judges and statesmen for about 300 years, and the whole collection, I hope, will eventually go to the New York Library, but this letter will be of interest to you. It is on the letterhead of the Supreme Court of the United States, Chambers of the Chief Justice, October 19, 1942:

DEAR MR. MONTAGUE: Thank you for your letter bringing to my attention Commissioner Robert M. Benjamin's report on administrative adjudication in the State of New York.

I have not seen the report but I shall get hold of it at the first opportunity and I shall look forward to seeing your review of it.

I did later publish that review, which appears in the February 1943 Michigan Law Review.

As I say, my relations with Dean Stason are very friendly, and I have a great admiration for him.

Going on with the letter of Chief Justice Stone: Making the administrative agency function as it should is the big prbolem of lawyers, and I am glad to see more attention being directed to that problem and less to finding ways and means of strangling such agencies. Yours sincerely,


Mr. Rabin. You know of no provision of law that prohibits an attorney from taking a retainer for appearing before a committee like this?

Mr. MONTAGUE. Not at all. I merely want to say they are good attorneys. Of course, they have the right. In the old days I used to do the same thing.

Mr. RABIN. It does not follow, merely because a man has a retainer in his pocket, that he is trying to mislead this committee, does it?

Mr. MONTAGUE. I do not think he is necessarily trying to deceive the committee, but I do not think he conceives it his duty to bring out things which are contrary to the things which his clients want to put into the statute book.

Mr. RABIN. Is that your standard when you practice law; is that the standard you adopt when you practice law?

Mr. MONTAGUE. I am frank to say, I must say it is pretty difficult, with all of my friendship and all of my admiration of these lawyers, to understand why they can come down here and say to this committee that the Federal Trade Commission does not decide or try to decide according to preponderance of evidence. It is just impossible for me to conceive anybody ever saying that, because those very men, when they argue a case before the Commission discuss preponderance of evidence.

Mr. RABIN. I address my questions not particularly with respect to what these witnesses have said, but I address my questions as to the standard that attorneys should adopt.

I want to know whether you consider it necessary for an attorney to conceal part of the truth or the whole truth merely because he has a retainer in his pocket? I am talking not about what these attorneys have done, but the general standard.

Mr. MONTAGUE. I cannot conceive of how a lawyer can come before you and make those statements.

Mr. RABIN. I am not talking about these lawyers. I am talking about the general standard.

Mr. MONTAGUE. I will say that the general standard-let me put it this way: If any of those lawyers in New York City, before anyone in any public hearing, had ever intimated that any judge in New York County, or any triers of the fact in New York County, did not search for the preponderance of the evidence, but merely tried to find such shreds that they could to hang a decision on, because they could slip by with it, two things would immediately happen:

First, the newspapers would comment on that statement.
Next, the Bar Association would get busy.

The Bar Association would immediately come to the defense against that kind of a charge made against those judges, and would then take disciplinary action against those statements being made by the lawyers.

For some reason or other, these gentlemen seem to think that they can make charges of that serious character against members of the Federal Trade Commission, which they would not dare or even think of making in respect to any judge.

That may indicate an answer to your question.

I do not think those are good standards, but I do not enforce my standards against them.

Mr. RABIN. You did not answer my question, because I specifically excluded from my question the specific references made by these lawyers who came before us.

I would like to know what you consider the standard to be, and whether you consider that it must necessarily follow that because a -lawyer has a retainer in his pocket, that he must, or should, or may make a misstatement to this committee or to conceal the whole truth or conceal part of the truth.

Does that necessarily follow? Mr. MONTAGUE. I will say it is an excuse. I do not say it justifies him. I will say this, in my day I never did it, but these gentlemen, I just cannot reconcile their behavior with behavior which is perfectly standard behavior to be expected of any lawyer referring to any judge, and I suggest that the same standard should apply before they make a serious charge like that against the Federal Trade Commission.

Mr. RABIN. The reason I ask that question is for the benefit of the bar. I do not want anybody to think that it is the lawyer's duty, whether he represents a client before a court, or whether he represents a client before a committee of this kind, to mislead or conceal.

I do not think that is the standard—just a minute—I do not think that is the standard, and if these lawyers have done it, and incidentally, I want to say I do not agree with you that they have, but if these lawyers have done it, then I do not think that they are complying with the standard of ethics set up by lawyers generally:

Mr. MONTAGUE. I am very fearful they have violated the standards you have described.

Mr. RABIN. Coming down to this rule of the preponderance of the evidence, I just want to say that I heard Dean Stason's testimony, and I did not come to the conclusion, in spite of what has been said, that he has departed from the substantial-evidence rule.

I came to the conclusion that what he said was that he believes the substantial-evidence standard to be a good one, provided the administrators, in their work, have certain safeguards thrown around the hearings.

You and I agree that perhaps there could be certain safeguards thrown around them.

Mr. MONTAGUE. What you say will be borne out by what I shall give to the stenographer.

Mr. RABIN. Am I wrong in that construction?
Mr. MONTAGUE. I do not think so.

I have read over Dean Stason's testimony, and I have been in very frequent correspondence with him. I have done a great deal of speaking on this subject before various bar associations and Dean Found, who has been quoted here, I have been on the platform with Dean Found, and, therefore, I have in my files a very complete record of what Dean Stason has suggested, and reading that over, it is unmistakable that he does not want a departure from the substantial evidence rule, and I will take the liberty of putting those statements in.

Mr. RABIN. The conclusion arrived at in his testimony was that he was not for this bill, and only this bill—that he believed that the substantial-evidence rule to be a good one, provided there be some safeguards to be thrown around it.

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