(The table and map referred to are as follows:) TRAVEL TABLE.-Federal Trade Commission v. Miles Laboratories, Inc., Docket No. 4993; Federal Trade Commission v. Capudine Chemical Co., Docket No. 4852 Capudine, pp. 1 to 137; Miles, pp. 1 to 145. Capudine, pp. 138 to 219; Miles, pp. 146 to 239. Capudine, pp. 220 to 340; Miles, pp. 240 to 364. Capudine, pp. 341 to 429; Miles, pp. 365 to 442. Capudine, pp. 430 to 450; Miles, pp. 443 to 473. Capudine, pp. 451 to 491; Miles, pp. 474 to 521. Capudine, pp. 492 to 590; Miles, pp. 522 to 634. Capudine, pp. 591 to 592; Miles, pp. 635 to 684. Capudine, pp. 593 to 634; Miles, pp. 685 to 726. Capudine, p. 857; The CHAIRMAN. The first witness at 2 o'clock will be Kenneth Perry, vice president, Johnson & Johnson, New Brunskick, N. J. (Thereupon, at 12:25 p. m., the committee took a recess until 2 p. m. of the same day.) AFTERNOON SESSION The committee met at 2 p. m., in room 1334, New House Office Building, pursuant to adjournament, Hon. Charles A. Wolverton (chairman) presiding. Mr. O'HARA (presiding). The committee will come to order. The next witness is Mr. Kenneth Perry, vice president of Johnson & Johnson, of New Brunswick, N. J. Mr. Perry, the committee will be happy to hear from you at this time. STATEMENT OF KENNETH PERRY, VICE PRESIDENT, JOHNSON & JOHNSON, NEW BRUNSWICK, N. J. Mr. PERRY. The purpose of this bill is to give the businessman his day in court. That court is to be the traditional common-law court, the district court of the United States in the district where the businessman has his business. Under a creeping process of administrative encroachment, sustained by judicial legislation, the businessman has become restricted to a day out of court before his adversary. This adversary has previously investigated the businessman's conduct and found it suspect. Accordingly, he prosecutes the businessman for the accused conduct. As an advocate this adversary then adduces evidence which at the same time he hears as a jury. Next he finds the facts with respect to this conduct. Finally, on the basis of these proceedings, as a judge, he orders the businessman with respect to present and future conduct. The businessman does not like it. He has the uncomfortable feeling that he is not sure of getting a square shake from an adversary who is investigator, prosecutor, jury, and judge all in one. It strikes him as an unholy quadrumvirate. Kenneth Culp Davis of the University of Texas School of Law has just published some significant comment on this situation in the February and March issues of the Harvard Law Review in an article entitled "Separation of Functions in Administrative Agencies." He states: Perhaps the strongest reason for complete separation is the widespread belief, whether or not misguided, that combined functions in the same agency is unfair despite internal separation * * * After all, when special students of the subject-the President's Committee on Administrative Management, and the minority of the Attorney General's committee--have assumed or found internal separation an insufficient protection, interests adversely affected by the Board's activities may very naturally develop a deep conviction that the system of organization is pernicious. So long as detached and informed opinions differ as to what is justice, one objective in a democratic society is to appear to do justice. That ideal remains unrealized so long as significant groups, whether or not misled, firmly believe that justice is denied. The "significant groups" who firmly believe that justice is denied include not only the businessmen, the President's Committee on Administrative Management, and the minority of the Attorney General's committee, but law professors, former agency heads, circuit court judges, distinguished Congressmen, and similar thoughtful, disinterested citizens. We are asked why these groups are not satisfied with the remedies provided by the Administrative Procedure Act. The answer is that the act fails to provide the day in court; it simply places certain restrictions on the adversary, who continues to be investigator, prosecutor, jury, and judge. It does not provide for a complete separation of the investigatory and prosecuting functions on the one hand and the finding and decisional functions on the other. It is a step in the right direction, but it does not go near far enough so far as the Federal Trade Commission is concerned. We are not dealing with a licensing agency such as the Interstate Commerce Commission or the Federal Power Commission, or with a claims agency such as the Social Security Board, the Veterans' Administration, or the Railroad Retirement Board. We are dealing rather with the private rights and properties of private individuals in adversary proceedings that have been for time immemorial the subject of protection and limitation for use by the courts. A procedure that may be appropriate for the FCC, CAB, ICC, FPC, SSB, VA, or RRB, may be totally inappropriate for the Federal Trade Commission. Addressing himself to this point, Mr. Davis says: The first step in any sound analysis is to recognize that broadside condemnation or approval of combination of functions is likely to be the product of ignorance. The next step is to appreciate the need for highly particularized solutions. Generalizations which are sound for one type of activity may be nonsense for another. Each kind of combination must be examined not in the abstract or in general, but in the context of a particular administrative activity. * * Some generalizations may be permissible, such as that one who is truly an advocate should never be allowed to participate in judging. But more often a greater particularity is requisite. Combination of investigation with judging may be bad in such prosecuting agencies as the NLRB, and FTC, but it may be harmless and even affirmatively desirable in claims agencies which are as much interested in making payments to the deserving as in withholding payments from the undeserving the Veterans' Administration, the Social Security Board, the Railroad Retirement Board. He quotes from the President's Committee on Administrative Management: The temptation for the Federal Trade Commission to decide that it has proved its own case must be very strong, and the businessman not unnaturally resents having his rights settled by an "interested" tribunal. * The Administrative Procedure Act provides for a degree of internal separation of functions. Since it was adopted for all agencies, the overwhelming majority of which are of the character of the FCC, CAB, ICC, FPC, SSB, VA, and RRB, it rejected complete separation. Congress has already given separate consideration, however, to an important adversary agency for which it considers the Administrative Procedure Act not appropriate and inadequate because it does not provide a sufficient degree of separation of functions. I refer to the Labor Management Relations Act (Taft-Hartley law). In this instance on a basis of selectivity and studying the operation of the National Labor Relations Board, Congress found that a greater degree of separation was required. Congress separated the investigating and prosecuting functions on the one side from the finding and deciding functions on the other. The present bill proposes complete separation with respect to a single agency. The proponents of the Administrative Procedure Act did not reject this notion. They were not considering the best individual solution for a particular agency. They sought a pattern to be applied generally but not exclusively. Some agencies they exempted from the coverage of that act, as totally inappropriate. In passing the Administrative Procedure Act, Congress must have had in mind the need later to deal more selectively with particular agencies, just as it has done in the instance of the National Labor Relations Board. The Attorney General's Committee on Administrative Procedure reported in part: There are, however, some agencies such as the Federal Trade Commission and the National Labor Relations Board whose principal duty is the enforcement by decision of cases, of certain statutory prohibitions. * * It is undoubtedly true that agencies whose only substantial task is that of enforcing the prohibitions of a statute through adjudication, especially in such controversial fields as that of unfair methods of business competition and labor |