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the fields of the other agencies—controversies between the Government and the citizen involving specific issues of fact and the application of the law to the determination of these facts. We are dealing with cases which affect the property rights of citizens, which affect the course of their business. I can illustrate by calling your attention to some cases which have been mentioned today.
In the Siegal case (Siegal v. The Federal Trade Commission, 150 Fed. 2d; 751, certiorari granted January 2, 1946) the subject matter was a trade-mark, “Alpacuna.” That trade-mark had been used since 1930 by the company. The Commission ordered it to cease using its trade-mark.
In th Herzfeld case (140 Fed. 207), the question was whether or not the corporation could use the word “Mills” as a part of its name. The Commission held that it could not and the court said that it could not alter the Commission's judgment, although this company in one way or another did have contractual relations with mills in different parts of the world. Yet it was denied the right to use the word “Mills” as part of its corporate name.
In the A. P. W. Paper Company v. The Federal Trade Commission in the Federal second circuit, the trade-mark involved is "Red Cross," the words and the cross, used by that company since 1905.
Now, I could carry that on. "I just mentioned those to indicate to you that the sort of things that are adjudicated here are such as trade-marks, advertisements, practices, and methods of doing business.
Now, I say to you that when these things are adjudicated by an administrative agency, there should be an effective judicial review just as though they had been adjudicated in a lower court. And that is precisely what this first amendment is about-shall there be an appeal and if so shall there be an effective review? As the statute stands today there is really no practical review. The review which is provided in the act is only that minimum of review which is accorded to the review of a regulation or legislative function. If you talk of reviewing facts but mean reviewing only to see whether there was some evidence-call it "substantial evidence” if you prefersuch substantial evidence to support the facts, that is simply reviewing to see whether the agency has acted in accordance with law, because if the agency has not had facts to support its findings in the sense in which that phrase is used, then it has acted arbitrarily and capriciously, and that is not in accordance with law.
Now, if we grant that there should be an appeal from the Com-. mission's adjudications, and proceed to ask what sort of appeal there should be, this bill answers that there should be a review of the facts and a review of the remedy, and I advance the following considerations in behalf of that position:
First, there is now no assurance that issues of facts are determined by the weight of the evidence. The Commisison may say that when it decides a case it weighs the evidence and decides on the basis of the preponderance of the evidence. Well, I am not going to have any personal dispute with any of my friends of the Commission about that, I am simply going to say to you that there is nothing in this act as it now stands which compels the Commission to decide a case in the first instance by the preponderance of the evidence. There is
nothing here that compels it, and there is nothing that the respondent can do if he has reason to believe that it has not decided the case on that basis.
Mr. Reece. That is, the respondent in your opinion, is estopped irom getting an effective appeal on that phase of the case.
Mr. HOGE. Yes, indeed, because when he goes up the only thing that the court may look for is to see whether there is, in the words of the act, "any evidence to support it," and in the words of the interpretations by the courts, "any substantial evidence to support." They cannot look to see whether the weight is on the side of the facts.
Mr. RABIN. I did not want to interrupt you, but at the time of the initial hearing, you said that there is nothing to indicate whether the Commission decided in accordance with the preponderance of the evidence. How then would the Commission decide? understand where one with a restraining order against him may think that they did not decide correctly, but it seems to me that the standard that they may use can only be that. Do you know of any other standard ?
Mr. HOGE. Yes, sir; that ought to be the only standard, but all they have to do is comply with the statute. The statute is tested by the review, so that all that they have to do is to meet the test which is statutorily laid as evidence in support of what they do.
Mr. RABIN. That is so far as review is concerned; but I mean the Commission itself, what standard does it apply?
Mr. Hoge. The Commission says that it applies the preponderance rule, but I say to you that there is nothing in the act which requires it and no way in which the respondent can compel it.
Mr. RABIN. I can understand the argument that the respondent cannot review it; I can understand that; but it seems to me that that would be the only standard for the Commission to use in its initial decisionthe preponderance of evidence. A particular respondent may not understand that they decided it correctly, but it seems to me that that is the only standard that they can use.
Mr. Hoge. It is the only standard that they should use.
Mr. REECE. Recently someone sent me a copy of an address which was delivered by Judge Martin, a very distinguished jurist in Memphis, who is a member of the Sixth Circuit Court of Appeals, I think before the Bar Association in New York. Were you present when that speech was delivered or have you seen it?
Mr. HOGE. I have seen it, Mr. Reece, and I have it here. It is in the American Bar Association Journal.
Mr. REECE. He seemed to deal rather effectively with that subject. Mr. HOGE. He makes very emphatic references to the situation which exists. It is on the question of review, Mr. Chairman, which I would make as a second observation here in behalf of this bill, that when you come to the review there is no weighing of the evidence permitted by the courts. Now I would like to call your attention to what Judge Martin said, and he was not talking of the Federal Trade Commission, he was talking of agencies in general.
Mr. Rabin. I do not want you to assume from what I have stated that I am opposed to an adequate or full review by the circuit court in accordance with the terms of this bill, I express no opinion on it. Mr. HOGE. I do not understand that you did, sir, and I am glad to have any question that comes to your mind.
Judge Martin is the circuit judge, one of the circuit judges on the Sixth Circuit, and he was addressing a judicial conference for the Sixth Circuit, on October 18, 1945. His address was in the Journal of the American Bar Association for December 1945, and the point I would like to call your attention to appears on page 625. He says this, and I repeat he is speaking of agencies in general, and I adduce it only as applicable to the one that we are talking about.
Judge Martin said: No more startling innovation has come about within the past decade than the widespread building up of administrative tribunals in derogation of the judicial power, which some of us have thought was firmly yested by the Constitution in the courts alone. So frequently have we been reminded of our inferiority in expertness to various administrative boards and agencies exercising more than quasi-judicial powers but still subject to our review upon petitions for enforcement of their orders, that some fortitude on the part of a circuit judge is necessary for avoidance of an inferiority complex. So steadily has our power of independent decision been curtailed by acts of Congress and interpretative opinions of the Supreme Court that we sometimes wonder whether we are considered inferior courts in an actual as well as in the comparative sense of the word "inferior" as used in the Constitution.
Our practical function in the review of rulings of administrative boards has been reduced to reading records for possible discovery of that rare case wherein there is no evidence however slight from which the board could reasonably have drawn inferences upon which a finding of fact was based.
I will skip a little more of it, but I do want to call this next passage to your attention because it seems to me a very significant one:
To my thinking it is not in the public interest that the seal of a United States circuit court of appeals should by compulsion become a rubber stamp for the approval of the all too often arbitrary action of an administrative agency. Unless through acts of Congress the people restore to the United States circuit courts of appeal a modicum of their former significance in the scheme of national government, their present partial eclipse may soon bạcome total. A fair appraisal of the record of these intermediate appellate tribunals would impel the conclusion that they deserve a higher degree of faith in their intelligence, efficiency, and expertness in the admininistration of justice than has been evinced in the gradual divestiture of their right to reason and to render judgment with appropriate independence.
Now, that is a circuit judge describing the situation as it exists. I do not think that there is any dispute really that the circuit courts are not permitted to weigh the evidence, because the Supreme Court has said it a number of times, the circuit courts are saying it with increasing frequency, and the Commission itself says it.
I would like to call your attention to something that the Commission says, as indicating from that authority, from the Commission itself, as to just what the situation is on appeal. I am going to read just one or two lines from the brief of the Commission in the Siegal case, referred to a moment ago. That is the case of Jacob Siegal v. The Federal Trade Commission in the Third Circuit. I am looking at pages 50, 51, and 52 of that brief, but I am quoting only portions from those pages.
The brief says this:
Section 5 of the Federal Trade Commission Act inter alia states that "the findings of the Commission as to the facts if supported by evidence shall he conclusive” (52 Stat. 113; 15 U. S. C. A. sec. 45 (c)). It is now Hornbook law that when the evidence in such matter is in a field of controversy, the weighing thereof is solely for the commission.
They cite cases, from one of which they quote, the Lighthouse Rug Company v. T'he Federal Trade Commission (35 Fed. 20, 163), the court saying:
There was substantial evidence to the contrary offered by petitioner and if the finding of the Commission had been to the contrary such finding likewise would have been conclusive upon this court.
Then they quote from Judge Hand in Moretrench Corp. v. Federal Trade Commission (127 Fed. 2d), where Judge Hand says
this: On the record we doubt whether we should have concluded that the “disparaging” statements were misleading but since our office ends as soon as we find substantial support for the finding, this part of the order must also be affirmed.
The brief continues: And yet again, said he, “As this was the only part found to hare been false, it is again hard to imagine how anyone reading it could have understood it as more than puffing. Yet for the reasons we have just given, if the Commission saw fit to take notice of it, we may not interfere.”
That ends the quotation.
Now, Mr. Chairman, I will not take your time to cite more of these authorities, there are any number of citations which establish conclusively that there is no power in the court to weigh the evidence.
Mr. REECE. Mr. Chairman, in correcting his remarks, I presume it will be all right if he wishes to embody some of those citations in his remarks as a part of the record. That would save time.
Mr. HOGE. I would be very glad to do that, sir. Mr. RABIN. You may do that. Mr. REECE. I think that that would be helpful. Mr. Rabin. That question is not in dispute, that is all right. Mr. Hoge. I do not think that there is any dispute about that, Mr. Chairman. I would like to have in this record a copy of the opinion of the Third Circuit in the Siegal case which has been referred to, because there Judge McLaughlin did review many of the recent cases. It was of the impotency of the court to modify the remedy he was talking of so much there. I would like to have that as a part, if I may, in extension of these remarks.
(The matter referred to appears at the close of Mr. Hoge's remarks. See p. 73.)
Mr. RABIN. There is no dispute on that point, is there? The question is one of policy, whether we should continue that method of review.
Mr. HOGE. I think that that is what it comes down to, whether we should continue what seems to be an admitted position, the helplessness of the courts at the present time.
Now, I want to say this to you, as bearing upon the policy: The immunity which this Commission enjoys is a greater immunity than the district courts of our land enjoys when trying the same sort of cases.
When trying these labeling cases, for instance, under the Food and Drug Act, or when trying other cases that involve deceit and unfairness and fraud and unfair trade practices, the Federal district courts do not have the immunity to review that this Commission has. The courts are dealt with by the rules of civil procedure, rule 52 (a), and I want to call your attention to a part of that rule which applies to the trial of cases in the Federal courts by the judges without juries. The rule is this, at that point:
Findings of fact shall not be set aside unless clearly erroneous, and due regard should be given to the opportunity of the trial court to judge of the credibility of the witnesses.
The notes of the Advisory Committee on the Rules say that this rule accords with the decisions on the scope of the review in modern Federal equity practice, and the Federal equity practice is that the judge's findings as to the facts may be set aside when contrary to the clear weight of the evidence.
In that case the courts do weigh the evidence and if they find that the findings are contrary to the clear weight of the evidence, they are reversed. One case has drawn attention to what we are talking of here in these words. I am quoting from Guilford Construction Company v. Biggs (102 Fed. 2d, 46):
A finding of fact is "clearly erroneous” if it is against the clear weight of the evidence, and it does not suffice that it be supported by evidence.
Likewise I would like to draw your attention to the fact that the review of the remedy which is proposed by this bill—the power of the court as this bill would have it to modify the remedy as to the court seems proper in the circumstances of the case-coincides with the power of the court, the appeal court, to review the order of the district court. I will give you a case on that, Thorpe v. The National City Bank (274 Fed. 200).
Mr. Rabin. May I ask a question in this respect; is it not true that it does not follow that if the higher court would have decided the other way, if it sat as an original court, it must necessarily reverse? The clear weight of evidence is more than that. It is greater than a difference of opinion.
Mr. HOGE. I think that you are right about that; yes, sir, I agree with that.
Now, in this case which I have just named, or just cited, speaking of the power of the circuit courts to review the orders of the district court, the language reads very closely upon this amendment: The circuit court of appeals has power to affirm, modify, or reverse any judgment lawfully brought before it for review, or to direct such judgment to be rendered, or further proceedings to be had, as the justice of the case may require.
Next I would like to observe that the Commission is not in the same position as the trial judge. It is a mistake in our thinking of review to put the Commission either in the place of the jury, which, of course, even the trial judge is not, or in place of the trial judge who sees the witnesses. You will remember that rule 52 (a), which I read to you, says that due regard should be had to the court's opportunity to observe the witnesses— "to judge of the credibility of the witnesses.”
Now, of course, it is Hornbook law as to the importance of the observation of the witnesses in the determination of the issue.
The courts have said, and I will cite on that the case of State Farm Mutual Automobile Insurance Co. v. Bonacci (111 Fed. 2d, 412):
The facts largely relied upon in this case consist of testimony and written statements given or made by the defendants not in the presence of the lower court but in the course of the trial of the damage actions in the State court. The lower court, as to such evidence, had no better opportunity of judging the credibility of the witnesses than does the appellate court.