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Mr. MONTAGUE. This applies also to Arthur Vanderbilt. I am speaking of the minority in the Attorney General's committee that reported in 1941. While the American Bar Association's committee on administrative law was originally a long way off from that, they finally unanimously came around with the views that you cannot have this preponderance-of-evidence rule, and that you must have the substantial-evidence rule.

Mr. O'HARA. The American Bar Association committee has been studying this, has sort of changed around, like the chameleon a good deal on this question, have they not; finally, they have gotten to a point where the Attorney General wrote that he thought it was a good rule, is that not true, as a matter of fact?

Mr. MONTAGUE. It is not quite true.

The American Bar Association finally sold the Attorney General. I went over that just a year ago with Dean Found, who is the exdean of the Harvard Law School, and I presume he has been the spark plug of the whole American Bar Association agitation on this subject, and he first started off on the idea of having a preponderance-ofevidence rule.

I said to Dean Pound when we were both speaking in Providence on this subject, in a forum on administrative law, I said, “Dean Pound, are you now in favor of this McCarran-Sumners bill?"

He said, “After full consideration, I am."

And I will put into the record some authorities to indicate why that thing is so. It is merely because, if you put this preponderence of evidence rule in the law, the courts just would not pay any attention to it anyway, because they cannot read over this whole thing again. They do not want it.

And the suggestion made by one of the witnesses that the courts were dissatisfied with the substantial evidence rule is all untrue.

I meet a great number of judges who know that administrative law practice before administrative bodies is my specialty. They have talked to me repeatedly about this.

I have talked with a great number of circuit court of appeals judges and other judges in New York, and there is not one who is in favor of this preponderance of evidence rule.

When they say, “We might decide it the other way.” that is just what they say in respect to the jury, but that does not mean they want the power. They do not want the power. They would not exercise it if they had it.

And when I was speaking 2 months ago in New York, in this address of mine which was serially reported in the New York Law Journal, I put into it something about this which has here been discussed, and there was an editorial in the Journal about it. As Congressman Rabin well knows, the appellate division of New York has the right, as you know, to review the weight of evidence again, but the court of appeals, to discussing the appellate division's right to determine the weight of evidence, in respect to some of the administrative agencies, has refused to let the appellate division set aside the findings and the orders of those agencies, even though the appellate division wished to decide according to the weight of evidence. The court of appeals seems to say, “We will disregard that." In other words, there is a pulling away from the preponderance of evidence rule in the State of New York.

I am going to put some devisions on this point into the record here.

They have attracted so much attention that there was recently an article in the Columbia Law Review about the reluctance of the courts to review questions of fact.

Mr. O'HARA. On that question of the reluctance of the court, with no reflection upon the courts, it is an easy way out, is it not?

Mr. MONTAGUE. That is it exactly.

Mr. O'HARA. It does not necessarily mean that substantial justice has not been done?

Mr. MONTAGUE. It merely is just like when I invite you to dinner, and

you don't say, “I am tired and do not want to come,” but you say, "I have another engagement”; it does not mean that you would necessarily come if you had no engagement. It is the usual thing that courts always say.

Judge Hand discussed this subject as much as 10 years ago, as to how impossible it would be, if you should make it the reviewing court's duty to review on the preponderance of the evidence these findings as they come up from the commissions and other courts.

I apologize for taking up so much of your time.

Mr. RABIN. My experience has been that the judges are glad that they do not have that right; they are glad that they do not have that right in many instances. Mr. MONTAGUE. Enthusiastically glad.

Mr. REECE. With reference to the interpretation that has been put upon the testimony of some of the proponents who have appeared before the committee, do you feel, when an attorney appeals from the decision of the judge on the grounds that the decision is contrary to the weight of the evidence, that that is a reflection upon the court ?

Mr. MONTAGUE. I can tell you that anybody who would make in respect of any judge the statements that have been made here before you, in which three times Congressman Rabin asked Mr. Hoge if the Commission did not try to decide by the preponderance of the evidence rule, and Mr. Hoge each time came back, not with the statement “yes,” but with statements giving the irresistible impression, as you read that testimony, that that is just what they do not try to do, Í

say that charge would result in disciplinary procedure, if made by Mr. Hoge regarding any judge in New York County.

Mr. SADOWSKI. Thank you, Mr. Montague.
It has been a very fine statement.
Mr. MONTAGUE. I thank you very much for your patience.

I would like to specifically name the Commissioner whom I mentioned; that is, Commissioner Benjamin-Robert M. Benjamin who is well known, I am sure, to Congressman Rabin, and I would like to pay a tribute to him.

May I also make the suggestion, Mr. Chairman, that you ask or permit the Federal Trade Commission to put in pages 615 to 624 and 629 and 643 and 644 of the December 1945, American Bar Association Journal, because those pages summarize everything which has been done for 10 years in the Bar Association. They state the substantial evidence rule which they approve of, and it is, as I say, the law

entirely as it now stands, so far as the substantial evidence rule is concerned.

Those pages are certainly worthy of far more importance as indicating the changed view of men who have studied it, approaching it just as I first approached it, from the opposite side.

Mr. SadowSKI. The Chair will grant you permission to include those articles.

Mr. MONTAGUE. You should certainly see them. The consist of the pages right next to the pages which have been read to you by Mr. Hoge and Congressman Reece from that same issue.

(Following are the pages in December 1945 American Bar Association Journal which are referred to by Mr. Montague:)

SENATE JUDICIARY COMMITTEE REPORTS ADMINISTRATIVE PROCEDURE BILL

An important step toward the accomplishment of long-needed reforms in administrative law and procedure, for which the American Bar Association and other public organizations have worked for many years, was taken on Monday, November 19, when the Senate Committee on the Judiciary reported favorably for the action of the Senate of the United States the proposed Administrative Procedure Act (S. 7) as revised.

The association's special committee on administrative law, of which Carl McFarland, of Washington, D. C., is the chairman, has approved unanimously the text so reported, as meritorious and as responsive to the declared position, and in furtherance of the policies, of the American Bar Association. Members of the Association will hail the committee's action with great satisfaction, and will study the report and the bill with keen interest.

In recommending the enactment of the measure, the Senate Committee on the Judiciary issued a comprehensive report and analysis, of which the following is a synopsis :

There is a widespread demand for legislation to settle and regulate the field of Federal administrative law and procedure. The Committee on the Judiciary is convinced that, at least in essentials, there should be some simple and standard plan of administrative procedure.

I. LEGISLATIVE HISTORY

For more than 10 years Congress has considered proposals for general statutes respecting administrative law and procedure.

In 1937 the President's Committee on Administrative Management issued its report, which the President approved, recommending the complete separation of investigative-prosecuting functions and personnel from deciding functions and personnel.

In 1938 the Senate Committee on the Judiciary held hearings on a proposal for the creation of an administrative court.

In 1939 the Walter-Logan administrative procedure bill was reported favorably to the Senate. It was passed by the Congress, but was vetoed by the President in 1940 on the ground, in part, that action should await the then imminent final report by a committee appointed in the executive branch to study the entire situation.

In December of 1938 the Attorney General had recommended the appointment of a commission to make a thorough survey and recommend improvements. The President authorized the Attorney General to appoint a committee for that purpose. It was composed of Government officials, teachers, judges, and lawyers in private practice. Its staff prepared, and in 1940–41 issued, a series of studies of the procedures of the principal administrative agencies and bureaus of the Federal Government. The Committee held executive sessions over a long period, at which the representatives of Federal agencies were heard. It also held public hearings. It then prepared and issued a voluminous final report.

Growing out of the work of the Attorney General's Committee on Administrative Procedure, several bills were introduced in 1941, and hearings were held. The international situation prompted a postponement of further consideration.

Based upon the studies and hearings in connection with prior bills, and after consultation with interested parties, S. 2030 and H. R. 5081 were introduced in the Seventy-eighth Congress on June 21, 1944. With the opening of the present Congress, a reyised and simplified bill was introduced by Senator McCarran, chairman of the Senate committee, as S. 7, and by Congressman Sumners, chairman of the House committee, as H. R. 1203.

Much discussion followed. The House Committee on the Judiciary held hearings in the latter part of June 1945. Previously, that committee and the Senate Committee on the Judiciary had requested administrative agencies to submit their views in writing. These were carefully analyzed, and in May of 1945 there was issued a Senate committee print which set forth in parallel columns the bill as introduced and a tentatively revised text. Again, interested parties in and out of Government submitted comments, orally or in writing, as to the revised text. These were analyzed by the committee's staff, and a further committee print was issued in June 1945. In four parallel columns it set forth (1) the text of the bill as introduced, (2) the text of the tentatively revised bill previously published, (3) a general explanation of provisions with references to the report of the Attorney General's Committee on Administrative Procedure and other authorities, and (4) a summary of views and suggestions received.

Thereafter, the Attorney General again designated representatives to hold further discussions with interested agencies and to secure and further correlate agency views. Private parties and private organizations also participated. Following these discussions, the Committee drafted the bill as it is now reported. The Attorney General submitted to the committees a favorable report on the bill, as elsewhere quoted.

II. APPROACH OF THE COMMITTEE

The principal problems of the Committee have been: First, to distinguish between different types of administrative operations. Second, to frame general requirements applicable to each such type of operation. Third, to set forth those requirements in clear and simple terms. Fourth, to make sure that the bill is complete enough to cover the whole field.

The Committee has avoided attempting to oversimplify the measure. It has not hesitated to state functional classifications and exceptions where those could be rested upon firm grounds. In so doing, it has been its undeviating policy to deal with types of functions as such and in no case with administrative agencies by name. Manifestly, it would be folly to assume to distinguish between “good” agencies and others. Comparison with Walter-Logan bill

The present bill must be distinguished from the Walter-Logan bill in several essential respects. It differentiates the several types of rules. It requires no agency hearings in connection with either regulations or adjudications unless statutes already do so in particular cases, thereby preserving rights of judicial trials de novo. Where statutory hearings are otherwise provided, it fills in some of the essential requirements; and it provides for a special class of semi-independent subordinate hearing officers. It includes several types of incidental procedures. It confers numerous procedural rights. It limits administrative penalties. It contains more comprehensive provisions for judicial review for the redress of any legal wrong. And, since it is drawn entirely upon a functional basis, it contains no exemptions of agencies as such. Comparison with Attorney General's Committee report

The present bill is more complete than the solution favored by the majority of the Attorney General's Committee, but is regarded as more definite than the minority's proposal. While it follows generally the views of good administrative practice as expressed by the whole of that Committee, it differs in several important respects. It provides that agencies may choose whether their examiners shall make the initial decision or merely recommend a decision, whereas the Attorney General's Committee made a decision by examiners mandatory. It provides some general limitations upon administrative powers and sanctions, particularly in the rigorous field of licensing, while the Attorney General's Committee did not touch upon the subject. It relies upon the independence, salary security, and tenure during good behavior of examiners within the framework of the civil service whereas the Attorney General's Committee favored short-term appointments approved by a special Office of Administrative Procedure.

III. STRUCTURE OF THE BILL

The bill as reported is not a specification of the details of administrative procedure, nor is it a codification of administrative law. It is an outline of minimum basic essentials. It is designed to afford to parties affected by administrative powers a means of knowing what their rights are and how they may be protected. By the same token, administrators are provided with a simple course to follow in making administrative determinations. The jurisdiction of the courts is clearly stated.

The bill provides for public information, administrative operation, and judicial review. The first of these is basic, because it requires agencies to take the initiative in informing the public. In stating the essentials of the different forms of administrative proceedings, the bill distinguishes carefully between the so-called legslative functions of administrative agencies (where they issue general regulations) and their judicial functions (in which they determine rights or liabilities in particular cases). In the rule making (that is, legislative) function, the bill provides that, with certain exceptions, agencies must publish notice and at least permit interested parties to submit their views in writing for agency consideration before issuing general regulations. No hearings are required by the bill unless other statutes already do so. Similarly, in adjudications (that is, the judicial function), no agency hearings are required unless statutes already do so, but in the latter case the mode of hearing and decision is prescribed. Where existing statutes require that either general regulations (called rules in the bill) or particularized adjudications (called orders in the bill) be made after agency hearing or opportunity for such hearing, then the bill spells out the minimum requirements for such hearings, states how decisions shall be made thereafter, and provides for examiners to preside at hearings and make or participate in decisions. The provisions for judicial review provide parties with a method of enforcing their rights in a proper case.

The bill is so drafted that its several sections and subordinate provisions are closely knit. The substantive provisions of the bill should be read apart from the purely formal provisions and minor functional distinctions. The definitions are important, but they do not indicate the scope of the bill since the subsequent provisions make functional distinctions and exceptions. The publicinformation provisions are of the broadest application because, while some functions and some operations may not lend themselves to formal procedure, all administrative operations should as a matter of policy be disclosed to the public except as secrecy may obviously be required or only internal agency "housekeeping" arrangements may be involved.

IV. ANALYSIS OF PROVISIONS

Statements in the committee report respecting each provision of the bill are designed to answer specific questions relating to language and objectives. These are omitted here, but there follows the synopsis of the bill as set forth in the committee's report. Section 1. Title

The measure may be cited as the Administrative Procedure Act. Section 2. Definitions

The definitions apply to the remainder of the bill.

(a) Agency.The word "agency” is defined by excluding legislative, judicial, and territorial authorities and by including any other authority whether or not within or subject to review by another agency. The bill is not to be construed to repeal delegations of authority provided by law. Expressly exempted from the term "agency,” except for the public-information requirements of section 3, are (1) agencies composed of representatives of parties or of organizations of parties and (2) defined war authorities including civilian authorities functioning under temporary or named statutes operative during “present hostilities."

(6) Person and party.—“Person" is defined to include specified forms of organizations other than agencies. “Party” is defined to include anyone named, or admitted or seeking and entitled to be admitted, as a party in any agency proceeding except that nothing in the subsection is to be construed to prevent an agency from admitting anyone as a party for limited purposes.

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